Skip to main content

Posted: 30 Jul, 2018

Assessing the opportunities and risks for asset-based lenders serving the construction and building materials industry

Written by Neal Weekes, Director, Gordon Brothers

The past ten years have seen overall growth in the UK construction industry. However, that growth story consists of winners and losers across sectors and asset types. Construction loans currently represent only 6.5% of asset-based lending activity, as cited by the Asset Based Finance Association (ABFA). This disconnect between industry performance, the asset intensiveness of construction, and the small penetration of asset-based lending to the industry represents untapped value for investors. But capitalising on that opportunity requires careful consideration of the sources of value, positive and negative.

Understanding the optimal timing for liquidation, the costs required to do so, and other factors that impact performance and recovery values will ensure lenders can succeed. Major drivers of construction asset values include overall market activity; trends within subsectors supported by construction; seasonality; asset specificity; equipment manufacturer preferences; commodity cost exposure; liquidation costs, and the viability of other soft assets that complement hard assets, such as rental streams.

To read the full article please click here


Back to News

TMA news

21 Nov, 2019

Post Conference Review 2019

TMA UK 2019 Annual Conference in London:

Review...

01 Nov, 2019

TMA UK NOW October 2019 event - A great success!

On 30th October TMA NOW hosted their first event...

23 Sep, 2019

TMA UK South East Counties launch event - Write up

Weakening World manufacturing output provides an...

Sponsor news

11 Nov, 2019

Wells Fargo Capital Finance UK team Wins Asset Based Lender Deal of the Year from Insider Media

LONDON – October 31, 2019 – Wells Fargo Capital Finance (UK) Limited, part Wells Fargo & Company...

04 Nov, 2019

Wells Fargo Capital Finance UK Strengthens its Originations Team

LONDON – October 31, 2019 – Wells Fargo Capital Finance (UK) Limited, part Wells Fargo & Company...

Tweets

TMA UK @UK_TMA · 7 days ago

Keep an eye out for our CEO, Jenny Oldfield at the TMA UK Annual Conference! She'll be presenting the Professional… twitter.com/i/web/status/1…

TMA UK @UK_TMA · 7 days ago

@UK_TMA @claire80lomas excellent and truly inspiring talk to the attendees at the #TMA conference in the City, than… twitter.com/i/web/status/1…

JCR

Oct 2019