Cumberland BS plans 25% growth in hospitality lending

A specialist lender to the sector, it has built up a portfolio of customers operating hotels, guest houses and self-catering accommodation not only on its home patch in North West England but across Yorkshire and the North East, the South West England and throughout Scotland.

Typically, the Cumberland provides loans from £150,000 up to £5m – the average is around £1m – advancing up to 65% of the valuation.

The society introduced a relationship manager structure last October as a springboard for further growth.

At the same time, it strengthened its team by bringing in bankers such as Scott McKerracher, head of commercial, who arrived with 37 years’ experience of lending to hospitality with Clydesdale/Yorkshire Bank and Bank of Scotland.

Scott said: “Every customer at the Cumberland now has a relationship manager who really understands their business and the sector. We have people on the ground in all the areas of the country where we lend. That creates trust and it provides a lot of value to customers – the feedback has been terrific.

“We’re doing what the banks used to do. They used to have relationship managers but in recent years have tended to centralise. Customers get pushed to call centres. They are desperate to have someone they can speak to who knows their business.

“Our customer-retention rates are very high, and the new relationship manager model will only strengthen that.

“I joined the Cumberland halfway through the pandemic and saw straight away what a great job our people were doing, spending time with customers to understand their particular situation.

“Everybody’s circumstances were different, and we had to find different ways of supporting them whether that be mortgage payment holidays, signposting them to grants and advice, or extending overdrafts or lending.

“The approach has paid off as we have seen businesses recover and arrears levels drop.

“We’re now dealing with customers who want to restructure debt to support their strategy going forward. We’ve done quite a lot of that.

“When someone approaches us for lending, we look for robust cash flow and we look at how the business traded before and through the pandemic and the outlook going forward.

“Whatever happens to the economy, we’ve no doubt that businesses with good management in great locations will continue to do really well.”