Commercial First, a specialist commercial lender, has blamed the failure of the credit markets for the suspension of all its new lending.
The firm says it completed a public securitisation in November 2007, but this facility has now been used up and planned arrangements have not materialised.
Stephen Johnson, sales and marketing director at Commercial First, explains: “We have explored every opportunity to obtain new funding.
“We have a business that made a profit of £13m last year and will make in excess of £20m this year, with a balance sheet of £1.6bn in performing mortgage assets at an average LTV of 68% and 4% margin – yet are still unable to obtain financing. It is abundantly clear the credit market has failed.”
The firm had received an initial offer from a potential buyer, but the events at Bear Stearns meant the offer for the business and additional funding was withdrawn.
Johnson reveals the firm has begun consultation with staff and is exploring all available avenues to return to the market.
He adds: “We have assembled a fantastic team of professionals and established a network of very loyal and supportive intermediaries. Collectively we are another victim of a banking crisis that was unthinkable only nine months ago.”
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