RBS to make decisions in 45 minutes on commercial real estate lending up to £2m

Royal Bank of Scotland is set to roll out a new automated lending process for commercial real estate developers and investors who are looking to borrow up to £2 million which will give them a credit-approved decision in as little as 45 minutes.

The new model is set to be introduced nationwide later this month following a successful pilot in Liverpool and London.

The new process covers all new applications for customers who want to borrow up to £2m for commercial and residential investment and residential development.

Subject to the customer providing relevant information on the asset or scheme in question as well as the management team’s track record, they will receive a credit-approved decision at the end of a call that should last no longer than 45 minutes.

To further improve efficiencies in the end to end process, Royal Bank of Scotland has appointed a small panel of national surveying firms that have committed to a maximum 10 day turnaround for completing valuations.

Additionally, part of the new process will see customers using their own solicitors in certain circumstances.

As a result, customers will be able to draw down their funds in a matter of weeks rather than months, as is the norm in the property industry.

Stuart Heslop, regional managing director, Real Estate Finance, Royal Bank of Scotland in Scotland, said: “We are determined to provide our customers with a better and more efficient service that will in turn provide them with a greater level of clarity and certainty for their development or investment plans.

“Historically, many of the processes involved in the property industry are the same for a SME or private investor looking to borrow against an uncomplicated, straightforward development or investment asset as they are for a corporate investor with far more bespoke and complex requirements.

“Throughout this process, our guiding principle was to take the pain out of property finance. We have spent the past six months stripping out anything in the process that is not vital to delivering an efficient service for customers while providing adequate protections for both parties. As we continue to streamline and simplify the process, we’ll be able to enhance its automated elements and eventually enable a fully digital-led process in the future.

“We believe that by giving our customers a same day, credit-approved decision, they can focus on what they do best – investing in and building the homes we need, the offices we work in and the places where we relax and play.”

The launch of the new commercial real estate lending process forms part of the bank’s wider innovation and digital agenda. It follows the launch earlier this year of Esme, a new digital platform that allows small and medium sized businesses to quickly obtain unsecured loans of up to £150,000. Royal Bank of Scotland has also introduced a new online lending platform which will allow SMEs to borrow up to £35,000 in a process which takes around three minutes. In December 2016 the bank launched Nift, a software platform that makes T&Cs easier for customers to read and understand.

Over the next five years, Royal Bank of Scotland is also investing £70m to give non-personal banking customers the best digital experience. The New Bankline will give customers a more intuitive, secure and efficient environment to work in. It will reduce the number of steps needed to complete a payment and will automatically compare and show customers the cheapest payment method.

JLL and GVA are two of the surveying firms on the bank’s valuation panel.

Jeremy Handley, Director - Valuation Advisory at JLL, said: “JLL is delighted to have been able to help Royal Bank of Scotland in the early stages of this new lending model. Royal Bank of Scotland has re-imagined the lending process to fit better with its customers’ needs and expectations and in doing so, challenged us to re-visit the valuation process to ensure that it recognises the bank’s needs within its new lending model.

“The new valuation process does not seek to reduce the level of professionalism we provide or to dumb down the advice, but rather to focus on what the bank really needs to know to aid its decision making.

“Neither the estate lending process nor the valuation process have changed dramatically in the last 20 years whereas almost every area of our financial lives has changed. The modernisation of these activities is therefore timely and much needed – and ultimately focuses on clients’ needs, recognising that clients always have a choice. We fully expect that we will see a drive to manage the SME end of real estate lending, and the associated real estate advice, in a different and more streamlined way. Royal bank of Scotland has already spotted this and acted on it. JLL is doing the same.”

Tim Crossley-Smith, National Head of Valuation Consultancy at GVA, added: “This new lending initiative will dramatically reduce both the time and cost for SME customers to access the smaller ticket debt markets, especially in the UK regions where many banks seem unwilling to commit.

“Many lenders adopt a ‘one-size-fits-all’ approach when it comes to assessing new loan applications, whereas this model has been designed to specifically address the needs of this particular segment of the market.

“The introduction of approved valuers and bespoke reporting formats will streamline the valuation process and provide borrowers with greater certainty of delivery.”