Industry wary on Enterprise and West One Loans deal

Experts say the acquisition of bridging lender West One Loans by specialist distributor Enterprise Finance could be seen as “contentious” and warn deals like this should be handled carefully.

Enterprise Finance announced the acquisition of the short-term lender for an undisclosed sum last week. The distributor says it has ambitions to grow the company and has retained all existing staff, including directors Duncan Kreeger and Stephen Wasserman, who will join the Enterprise board.

West One Loans has first-charge lending permissions but Enterprise Finance says it will focus on second-charge loans during a “bedding-in” period and then look to offer a wider proposition.

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Enterprise Finance chief executive Danny Waters (pictured) says: “From now on, our strategy as a group will be focused on both organic and buy-to-build growth, with this the first of a number of planned acquisitions.”

West One Loans director Duncan Kreeger says: “This deal will give us more firepower and enable us to expand far more quickly.”

Brightstar Financial chief executive Rob Jupp says any deal that sees a distributor purchasing a lender should be approached
with caution.

Jupp says: “Enterprise needs to be careful about how it approaches this deal because there are obvious questions that get raised when a broker or a distributor takes on a lender. It’s important in these situations that the purchasing distributor doesn’t then tailor its advice offering with a commercial interest in mind. It can work well but that does need to be a consideration.”

Precise Mortgages managing director Alan Cleary says: “It isn’t the first time that this kind of deal has taken place but there are obviously potential points of contention that can arise. If managed properly, this could be a good deal for both parties but there is of course the question over whether there is a vested commercial interest in recommending particular products for the broker.”