Three Funding Tiers
1. High Street Banks – (usually providing senior debt funding) these are the banks that have a "retail front door" – for example RBS, HSBC, HBoS, Barclays, Lloyds TSB, etc.
Typically offering very similar products, the same solutions, and the same interest rates, they generally go about their business on a "work on our terms basis". This approach pays little respect for the needs of the client, BUT is the benchmark for service levels and interest rates – both of which are low.
2. Off High Street – (usually providing senior debt funding) these are banks in their own right BUT generally do not have a "retail front door" – for example Clydesdale, Allied Irish, Bank of Ireland, Commercial First, Fortis, etc.
The terms offered are usually far more flexible (e.g. higher loan to value rates) and they lend on a case by case basis, recognising that most property deals are individual in their own right. For this flexibility, they (justifiably) charge a higher rate.
3. High Net Worth Organisations (usually providing mezzanine funding) – these could be companies (like Manta) or persons of a high net worth who are looking for investments that provide a higher than average return on their investment. Short term Property Development Finance is one of these vehicles.
They allow 100% funding, with the funding inclusive of all legal costs, stamp duty for purchase as well as the cost of the land and development itself. Manta can even roll up the interest, so the whole debt is settled on resale. This attracts a higher rate as there is no financial risk from the client.