Proportunity, the startup that is giving first-time buyers a step up, confirms a debt injection of up to £ 7.5m to meet record post-UK housing boom demand. The new facility allows the company to help more first-time buyers and fuel Proportunity’s recent growth – doubling its portfolio in the past two years in the past two months. As the only 5% deposit lender (apart from Help to Buy), the company wants to accelerate growth even further. It hired Marita Cavalcanti (ex-OakNorth, Ebury and Nomura) as CFO, launched a new broker platform and joined Tech Nation’s newest fintech cohort.
Getting into a bank debt deal during a pandemic is no small feat – it is likely a first for the UK startup scene. The lion’s share of the new debt financing came from Conister Bank.
Douglas Grant, Director of Conister, commented:
“Conister aims to support emerging and high impact businesses at a time when other players have declined and borrowers are in dire need of liquidity. UK SMEs have demonstrated an incredible level of adaptability and resilience in the face of changing consumer behavior as a result of the COVID-19 pandemic and we are delighted to support Proportunity as it seeks to make a positive contribution to the dynamism of the UK housing market the lockdown and to help its customers realize their dream of owning a home. “
Proportunity offers home buyers a deposit that increases equity by up to £ 90,000 so they can afford the home they love with just a 5% cash deposit.
A timely product in a housing market that’s currently seeing the greatest demand from first-time buyers in a long time – as they own their own home with the new work from the home environment and want to take advantage of the new stamp duty relief – but where COVID-19 has made it a lot more difficult for them to get a mortgage.
As mortgage lenders are withdrawing low-deposit products (the minimum deposit has increased from 5% to 15% at most lenders), Proportunity’s home equity loan has become one of the few remaining options for aspiring homeowners.
As a result, the demand for the deposit-increasing opportunity loan has increased, particularly from buyers looking to own existing properties that are not eligible for the government purchase assistance system.
Commenting on the recent market momentum, Vadim Toader, CEO and Co-Founder of Proportunity:
“When the pandemic hit, we were able to leverage our real estate market technology to quickly adjust lending decisions, increase the resilience of our portfolio, and continue to issue loans that forced other lenders to withdraw mortgage products or suspend lending entirely. This makes us the only 5% LTV lender in the UK. Our number of loans has grown exponentially since then and we expect to double our loan volume every quarter over the next 6 months. I would like to personally thank Conister and her team, including Kai, for believing in us. Without them it would not be possible. “
In addition to two of the top five UK mortgage lenders, Proportunity has contributed over £ 22 million in real estate financing since it began lending in 2018. To help as many aspiring homebuyers as possible find a opportunity loan, the digital mortgage lender had to implement a waiting list and a £ 90,000 cap on newly issued home equity loans. But unlike mortgage loans from many banks, cash flows smoothly into borrowers’ pockets.
The company’s outlook will no doubt remain capital-intensive, so Proportunity’s is also announcing Marita Cavalcanti as her latest appointment to join OakNorth Bank as CFO. She will be responsible for growing her leverage by bringing more institutional money into Proportunity’s loan fund.
Much of Proportunity’s growing new business comes from mortgage brokers sourcing solutions for buyers left out of pocket by the market after adding over 200 new brokers in the previous quarter. For this reason, the lender has introduced a new intermediary platform.
Stefan Boronea, CTO & co-founder of Proportunity: “Our partners are at the center of our success. This year we’ve spent a lot of time listening to your feedback, fully digitizing and automating the opportunity loan application process. This will help us better serve our existing intermediaries by drawing new loans much faster. This also enables us to bring new partners on board more quickly. In 2020, we faced unprecedented platform usage. The automation of the whole process was crucial to optimize the growing demand in the new year. “
Proportunity was also recently selected to join Tech Nation’s Fintech 3.0 cohort, a growth program that supports the UK’s rising star fintechs, known for splitting off financial challengers that have now become household names like Monzo and Revolut.