We recently caught up with Roxana Mohammadian-Molina, Chief Strategy Officer at UK’s Blend Network, a specialist development finance lender.
Blend Network‘s Roxana Mohammadian-Molina talked about some of the landmark projects that they’ve helped out this year. She also commented on what her team is doing to help property developers across the United Kingdom while providing insights on the company’s plans for 2022.
Our conversation with Roxana Mohammadian-Molina is shared below.
Crowdfund Insider: You recently shared your landmark projects of 2021 including the Cheltenham, Gloucester, Sunderland, and Ferndown projects. Tell us about why these were so noteworthy and also about some other significant achievements this year.
Roxana Mohammadian-Molina: Indeed, these were some of the schemes we really enjoyed funding, because the borrower behind it was a pleasure to work with, and also because the project itself was awesome and really unique or because we love the finished product.
Each project was unique in its own way, often challenging projects where we enjoyed working with the borrower to be able to offer a solution – because we pride ourselves on being solution-focused lenders.
Crowdfund Insider: You’ve noted that specialist lenders need to play an important role in deploying more funding into the housing market.
Explain in detail how your team plans to support these efforts.
Roxana Mohammadian-Molina: That’s right, specialist development finance lenders can and must be part of the solution if we are serious about tackling the housing crisis. Covid-19 was the first big test for the specialist lending industry and I’m delighted to be able to say that it’s passed the test with flying colors.
When Covid-19 hit at the start of 2020, it quickly started to become apparent the pandemic would test the industry and provide it with a unique opportunity to prove its worth.
Fast forward 21 months since the start of the lockdown, we can now say that this was indeed a challenging test for the industry, one that allowed some specialist lenders to emerge stronger while many other platforms had to scale back their operations or shut down.
There is a simple reason for the strength witnessed that goes back to the purpose for which specialist lenders were created in the first instance: traditional lenders had neither the capacity nor the appetite to lend and their absence was quickly filled by dynamic lenders willing to step in and lend. Being smaller, nimbler, and more agile, specialist lenders are often able to offer more tailored lending solutions compared to banks and mainstream lenders.
Crowdfund Insider: In October 2021, your team reported that they had helped with funding the construction of 164 residential units.
Your team revealed that this represented an 11% increase compared to the number of residential units funded in the whole of 2020 and a 156% increase from the units funded in 2019.
Please provide an update on these initiatives.
Roxana Mohammadian-Molina: 2021 has been yet another record-breaking year at Blend Network and we are now on track to more than double our lending yet again (after more than doubling our lending in 2020 amid the pandemic). I still don’t have the exact number of units we’ve funded in 2021 as a whole, but can report we are on track to more than double our funding.
Crowdfund Insider: Please walk us through how you carry out your due diligence and underwriting process.
Roxana Mohammadian-Molina: Our lending team of property experts, headed by Registered Chartered Surveyor Paul Watson, are responsible for sourcing property loans with an attractive risk/reward and carrying out an in-depth due diligence process on the loan and on the borrower before agreeing to lend. Our credit team conducts a solid appraisal of each project, which includes checking the following:
The project
– Location
– Costs
– Comparable
– Profit
The borrower
– Experience
– Track record
– Can the borrower deliver this project?
– KYC/AML, Credit checks
The exit
– Liquidity
– Refinance or sell
Independent due diligence
– RICS Valuation
– Solicitors
– Monitoring
You can read more about how we carry our due diligence in this blog post.
Crowdfund Insider: Your team remains committed to helping SME property developers with unlocking funding to build more homes. Explain why this is important to the UK economy.
Roxana Mohammadian-Molina: While the home building sector in its entirety has flourished over the past six years, SME developers have continued to face a number of challenges and obstacles which have hindered their ability to grow. According to a recent report by the Home Builders Federation, although there has been an unprecedented 93% increase in housing supply since 2012/13, this has mainly been due to the contributions of the largest housebuilders while SME property developers and small construction companies find it increasingly difficult to compete and unlock funding.
However, this has not always been the case. In 1988, small developers were responsible for four in every ten new build homes, compared to around just 10% today. The number of SMEs in the home building sector has declined consistently since the beginning of the 1990s, and lack of funding is one of the key reasons. This is why we at Blend Network remain committed to supporting SME property developers to build the homes the country needs.
Crowdfund Insider: You’ve provided an AutoLend feature to automate the lending process via your platform. How has this helped clients?
Roxana Mohammadian-Molina: AutoLend is now a key feature of our platform and a feature that’s much loved by our investors because it enables them to select their investment criteria and simply lend in an easy and hassle-free way. AutoLend has helped our investors save time by automating their investment process without sacrificing return. In fact, investors using AutoLend have ‘priority’ over investors lending on our loans manually.
Crowdfund Insider: In mid-2020, your team reported a solid Q2 2021, with 1,052 registered investors lending via platform loans.
How are things going at the moment? Have you made more progress?
Roxana Mohammadian-Molina: 2021 has been yet another record-breaking year at Blend Network and we are now on track to more than double our lending yet again (after more than doubling our lending in 2020 amid the pandemic).
Crowdfund Insider: What are your plans for 2022 and beyond?
Roxana Mohammadian-Molina: Our plans for 2022 revolve around continuing to expand and scale our business, with a particular focus on key strategic partnerships across different verticals in our industry and sector.
We strongly believe in the power of strong partnerships and in 2022, we want to continue to build upon our recent strategic partnerships, such as the collaboration with LDS Sales Guarantees that allowed us to launch our new product ‘Blend Network Development Plus, powered by LDS.’