Property developer turns to P2P after bank withdraws funding due to Brexit
A PROPERTY developer based in Northern Ireland turned to peer-to-peer funding to complete a project after its bank withdrew financing in the wake of the Brexit vote.
Maillot Jaune had originally sought funding to build 11 flats on a seaside, brownfield site in Grey Abbey, County Down in 2006. However, the residential property sector fell into a deep recession after the economic downturn so the project was mothballed.
Planning permission subsequently expired and the developer submitted a revised application for eight terraced houses which was granted in August 2016.
Kieran Trainor, director at Maillot Jaune, said that the firm’s longstanding banking partner had agreed to finance the project but suddenly pulled out in March this year.
“Following the Brexit vote, the bank became nervous and without warning pulled the plug on the whole thing,” he said.
The property firm had obtained planning permission from the local planning authority and had instructed builders to start work on a specified date, but suddenly had no funding.
It managed to obtain a P2P loan through business finance consultancy F&P Sponsors and the project is almost finished.
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“I had been looking at different alternative finance organisations, but wasn’t happy with the terms,” said Trainor. “I then came across F&P. Compared to bank finance it isn’t particularly cheap, but this project would not have got off the ground without its help and the P2P finance agreement it arranged.”
The impact of Brexit on Northern Ireland has been fiercely debated, with critics arguing that a lack of support for the province when EU funding is withdrawn could have catastrophic effects, both economically and socially.