myi: We last interviewed you in 2010, has the market changed much for y3s since then?
MC: The market has changed a lot in the last 2 years, and for the better; new secured lenders have appeared and others have loosened up their criteria to compete, although it is still fairly tight. We've doubled the size of our debt management book and established ourselves in the bridging loan arena as a main player, having signed key partnerships with some of the biggest lenders and having invented and rolled out the first ever bridging loan sourcing system.
myi: How are you finding the current market conditions?
BD: A lot better than in 2010 which was better than 2009. While it is still fairly difficult out there, it's not impossible to generate a decent profit. The troubles in the Eurozone are obviously a concern, but we're all sitting ducks if it goes wrong, so why worry? You just have to hoard as much cash as possible and not borrow money to trade. For us, trading today feels like it did back in 2001/2002, during the last cycle. The restricted products of today are very similar. We managed to trade profitably back then, and as the decade wore on the industry developed exponentially. If the Eurozone holds up, I fully believe that the same thing will happen in this new cycle, although not to such a degree as last time.
myi: You launched your new sourcing system last year. What has been the response of brokers so far?
MC: miLoan was launched in July 2011 following 10 months of internal development. There was a clear gap in the market for a new sourcing system and we decided to go for it early in the new cycle so that we could be far ahead of anyone else who tried to imitate us. It was a risk as we invested £120,000 into it. The gamble has worked, over 3300 brokers signed up to use the system in the first 10 months, which is about 1 in 4 brokers, with 20% logging in each month. It has generated revenues in excess of £600,000 in its first year, 225% of target - a superb ROI, especially in this market. It's the fastest growing sourcing system for brokers. We expect it to go on to do great things.
BD: We launched a bridging loan sourcing module for it a few months ago, an industry first, which has so far generated around £20,000. miLoan is now a serious part of the group's business structure and we believe that it alone will deliver £1.5m to £2m to the group in its next 12 months of existence. We'll keep developing and providing it free of charge. Our plan is to have 10,000 users by the end of 2013.
myi: You've been in the industry for over 10 years, how do you remain competitive amongst your peers?
MC: We try to reinvent ourselves constantly by looking for and investing in new projects and challenges and pushing innovation where our competitors don't or won't. The things we do work the majority of the time and it's a lot more fun than being the same as everyone else. Equally important are our superb management, sales and IT teams that have stuck with us for many years through thick and thin. They make our ideas a reality, no matter how wacky they may seem.
BD: Our FD Benson Yeadon is a tight Yorkshireman, he always keeps a close eye on costs and ROI, and if something isn't working we stop and move on. For new brokers coming into the market it will be difficult; profit margins are thinner and you have to know your game extremely well to survive and grow in the industry today. That said, we welcome all new competition, because it keeps us on our toes and drives the industry forward.
What are your predictions for the future of the industry?
MC: As long as the mortgage industry remains flat, secured and bridging finance will continue to flourish. Debt management solutions will remain important financial instruments for those at the tougher end of the debt scale. Current forecasting shows that the mortgage market will start to grow more significantly from 2015 and regulation and compliance will become perhaps even more intrusive and form a barrier to new entrants, brokers and lenders alike.
Our companies have provided additional earning opportunities to thousands of financial intermediaries for over a decade, but we still have to bang the drum hard to get the business through the door. It's a relentless and unforgiving task which isn't for the weak or faint-hearted. Times will remain tough for some time to come so brokers will have to continue to think outside the box in order to survive and flourish.
myi: You've become rather well-established in the secured loan, bridging loan and debt management sectors; what are your plans for the future of Y3S?
BD: Our plan is simple: to do more of what we do and be at the cutting edge of innovation while remaining profitable and having a ball while doing it. We employed over 100 staff before the credit crunch affected all our businesses in 2008. Today we have just fewer than 40, so until we grow to that peak again, we won't feel as if we have developed beyond our comfort zone. While we have bills to pay like everyone else, we are in it primarily because we love what we do and we want to be successful in our chosen field.
Y3S Group offers secured loans, bridging loans and debt solutions to clients of finance intermediaries across the whole of the UK. The group also owns miLoanbroker.com, the loan sourcing software with 3,400 users.
