The construction sector has seen so much change since the COVID-19 broke out – from the lockdowns initially, supply chain disruption, price increases, and to, increasing inflation, along with the adjusting factor of interest rates on the rise driven by banks.
Clinton Arentz, executive director of Trilogy Funds Management, said it’s the large-scale lender’s very proactive management style that has enabled the company to help its developer clients work their way through all those challenges from beginning to end.
“We lean into those challenges,” Arentz said. “We work with those borrowers quite closely. But a lot of that has to do with setting up to succeed in the beginning.”
The Trilogy Funds leader said the lender also takes great value in the quality of the lending submissions and proposals it receives from commercial brokers. The lender uses those to make an initial consideration around a loan and to understand all the elements, the strengths, the weakness, as well as the challenges the project might have, so they can go into it with strong footing.
“And that helps us help the developers during the course of the project,” Arentz said. “And that's been a good steward for us in terms of keeping our default rates low, success rates high, repayments very strong.”
As a lender, Trilogy is well placed to face various challenges as they emerge. It can understand, deal with, and manage construction risks properly – and a huge part of that is due to Trilogy having a strong back of house.
“We’ve always prided ourselves on our strong back of house, which of course is the unsung hero in the construction,” Arentz said.
“Lending space is very easy sometimes to write a loan and introduce new business, but all of the test is at the back end – as the project is completed and the sales are made and the construction is finished and all the numbers still stack up and all of the stakeholders get a return, strengthen their model to move on to yet more projects.”
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