“Charity Bank are willing to have conversations and reach solutions”

When Luton Community Housing Limited (trading as Squared) needed to refinance, it went through an extensive tendering process. Together with a consultancy firm, it looked at 10 different lenders. Charity Bank came out on top. We loaned the housing association £7.5 million and facilitated an additional £4.5 million from Better Society Capital.

CEO Kierson Benfield and Finance Director Lee Schopp share how they found the process of getting the loan.

Why did you need a loan?

Lee: We needed to refinance because our existing loan was coming to the end of its agreement term. The new loan also freed up working capital; we have large cash reserves, but we wanted to maintain that for a programme of property improvements that we’re carrying out over the next five years. So, the new loan gives us a stable platform whereby we can use our cash for the improvements, knowing that we have a long-term lender and that repayments are budgeted for.

What made you choose Charity Bank for your loan?

Lee: We went through an extensive tendering exercise. We looked at all the lenders who have a track record of working with housing associations. We used a consultancy company called 2Tix Limited to assist us with that process, and together we identified a list of about 10 banks, which we then wrote to. We’re quite a small housing association, and some of the banks just weren’t that interested. But Charity Bank responded, and their terms were very favourable.

So, we shortlisted them, met with them, and found their approach to be very pragmatic. They weren’t overly bureaucratic and they seemed a good fit for us. Their ethical stance was another tick in the box.

How did you find the process of getting the loan?

Lee: It was easier than I expected. Charity Bank wanted to work with us towards that end goal, and the team really helped us to overcome any hurdles. You could talk to people, and they were willing to have conversations and reach solutions with us; they weren’t just pushing everything back to their solicitors.

Kierson: It all seemed very straightforward. There was a mutual understanding. They were very responsive and quick to come back to us. If an issue came up, we had a conversation and it was addressed.

Lee: The post-completion service has been just as good. I’ve continued to find them incredibly easy to deal with and very helpful. They don’t just do the deal and leave you.

Charity Bank has a lot of experience working with housing associations. Do you think that helped to make the process easier?

Lee: Definitely. They understood our business model, budgets and valuation method, which helped a lot.

Is there anything housing associations should do to prepare for taking out a loan?

Lee: Do your groundwork, so that you can show that you have a strong business case, know where you’re going as an association and why you need the finance.

What’s next for Squared?

Lee: Now that we have our long-term financing resolved, we’re spending considerable sums in capital expenditure on our existing portfolio, to make sure that our properties stay within the Decent Homes Standard. We’re also looking to expand over the next few years.

Kierson: There’s a high need for housing in Luton and Bedfordshire, but the type of need changes. As a housing association, we try to adapt to that need. We have a leased portfolio alongside our owned property, so that we can support our community and the people in need around us.

Would you turn to Charity Bank if you needed a loan to buy more properties?

Lee: Without a doubt. If we need financing for something like that, Charity Bank is probably the first place we’ll go.

If you need a loan for your housing association, please contact Charity Bank at [email protected].