Mayfair Bridging has developed an innovative funding model to supplement its market leading underwriting capability.
The new product will target sophisticated investors looking to find high returns from different investment sources.
Although many new funding models, such as Crowd Funding, have struggled to gain recognition from the FSA, Mayfair Bridging’s product was designed to meet tough regulatory standards.
Shoaib Bux, director of Mayfair Bridging, said “We are delighted to gain authorisation from the FSA to offer syndicated loans as UCIS.
“When we first looked at this funding model it seemed to us a quirk of regulation that a single loan was not regulated but a syndicated loan is classified as an Unregulated Collective Investment Scheme.
“However, when we explained to the FSA what we wanted to do, the investors we would target and the safeguards that are in place they agreed to authorise us to provide this product.”
Mayfair’s syndicated loans will be offered to professional clients or investors classified as Sophisticated by their IFAs.
Although the rules relating to the distribution of UCIS are expected to be tightened up by the FSA in the new year Mayfair Bridging do not perceive that this will prevent the right investors from investing in their loans.
Shoaib Bux added: “A specialist investment such as a syndicated bridging loan is only appropriate for sophisticated investors who understand the product and the risks.
“However, we have prepared our product and supporting documentation to make it easy for the IFAs to assess and classify their clients appropriately and in line with the FSA’s rules on the promotion of UCIS which are widely misunderstood. IFAs introducing their clients to us will receive an introductory commission.”
Mayfair Bridging was advised by city consultancy Compliancy Services for the management of the FSA application.
Ben Mason, managing partner, said: “By focussing on sophisticated and professional investors, and by providing a robust underwriting process and loan product, Mayfair is bring to the market an interesting and alternative investment opportunity, which is fully compliant with the FSA’s tough regulations in this area. This gives them a compelling proposition to take to the market.
“We were delighted to work with Mayfair Bridging and wish them all the best in this exciting new development for their business.”