Sancus Gibraltar presentation 19th September 2017

19th September 2017
Sancus BMS Group
The Future for Alternative Finance
Andrew Whelan

This document is confidential and should only be circulated with prior approval from Sancus BMS Group.2 | 20/09/2017
GLI Finance Investment Portfolio of SME Lending Platforms

Bank lending to firms has collapsed over the last few years
£10
billion
Fall in lending
to UK firms
Now finally
stabilising
Source : Funding Options

4
Structural and permanent
change – bank lending is
next
1995 2000 20102005 2015
Auctions Real Estate Bank Lending
Future
Online Technology and Disintermediation
Disintermediation “reduction
in the use of intermediaries
between producers and
consumers”
Airlines Travel AccommodationShopping Music

Alternative Finance - Taxonomy
Alternative Finance Model Definition
Marketplace /P2P Consumer Lending Individuals or institutional funders provide a loan to a consumer borrower.
Balance Sheet Consumer Lending The platform entity provides a loan directly to a consumer borrower.
Marketplace/P2P Business Lending Individuals or institutional funders provide a loan to a business borrower.
Balance Sheet Business Lending The platform entity provides a loan directly to a business borrower.
Marketplace/P2P Real Estate Lending Individuals or institutional funders provide a loan secured against a property to a
consumer or business borrower.
Real Estate Crowdfunding Individuals or institutional funders provide equity or subordinated-debt financing for
real estate.
Invoice Trading/Supply Chain Finance Individuals or institutional funders purchase invoices or receivable notes from a
business (at a discount).
Equity-based Crowdfunding Individuals or institutional funders purchase equity issued by a company.
Source : University of Cambridge Judge Business School

Traditional Banking versus P2P
 Government Endorsed
 Attractive Rates
 Convenient
• Cost Inefficiencies
• High Margins
• Restrictive Lending
Lenders and Borrowers share the margin that banks traditionally captured
Lower Rates
Traditional Banks
Sancus BMS Group
Costs
and
Margins
Costs
and
Margins
Margin
&
Costs
Margin
&
Costs
Better Returns
Depositor
Borrower
Borrower
Lender

Alternative finance growth worldwide
Source : University of Cambridge Judge Business School / KPMG FinTech
(US$ billion cumulative)

Alternative Finance Maturity by country (as at 2015)
Source : University of Cambridge Judge Business School / KPMG FinTech
Adoption of alternative finance by country, adjusted for volume per capita. The maturity of each market shows
USA ahead, followed by China and the UK

Total Quarterly P2P Cumulative Lending (UK estimate)
2.27
2.7
3.28
3.91
4.67
5.5
6.42
7.25
8.13
9.18
0
1
2
3
4
5
6
7
8
9
10
Q3
2014
Q4 Q1
2015
Q2 Q3 Q4 Q1
2016
Q2 Q3 Q4
£billion
Total amount lent to individuals/firms at the end of each period
Total Cumulative Lending
Cumulative Business Lending
Cumulative Consumer Lending
Source : University of Cambridge Judge Business School

BBB and ISIF – where do they come in?
The British Business Bank
 100% Government owned business development bank;
 “Making finance markets work better for smaller
businesses”;
 Aimed at start ups, high growth and viable but
underfunded businesses;
 Working with over 90 trusted partners;
 Value of loans drawn 2016, £207m (2,015 loans).
Ireland Strategic Investment Fund
 Managed and controlled by the National Treasury
Management Agency;
 Policy of commercial investment to support economic
activity and employment in Ireland;
 Strategy to co-invest with trusted partners;
 Strong connections with both the public and private
sectors across multiple industries;
 Currently €8 billion available to deploy.

Evolution of the P2P Marketplace, moving to I2P and hybrid models.
SME Debt
Consumer Debt
Lenders Borrowers
Online Peer-to-Peer
Marketplaces
Real Estate Debt
UK SME Loans
Retail Capital
Institutional Capital
Balance Sheet Capital

Retail
HNW
Family
Credit
Retail Retail
HNW
Poised for Institutional Capital as at June 2013
US P2P loan origination growth of 6% to 8%+ monthly
$-
$500,000,000
$1,000,000,000
$1,500,000,000
$2,000,000,000
$2,500,000,000
Jun-07Oct-07Feb-08Jun-08Oct-08Feb-09Jun-09Oct-09Feb-10Jun-10Oct-10Feb-11Jun-11Oct-11Feb-12Jun-12Oct-12Feb-13Jun-13
Lending Club
Prosper.com
Lending
Club SEC
Registration
Prosper
SEC
Registrati
on
2016
Lending
Club
US$18bn
2016
Prosper.com
US$10bn

The Good, The Bad and The Ugly
Not too far away
A strong global economy, but uncertainty lies ahead.
Across the pondOur back yard

What about Brexit?
Political and economic uncertainty - from the UK perspective
What we have seen so far
 £ weakened against $ and €;
 Some real estate has declined in value;
 UK downgraded by several credit agencies;
 Disruption in the ability of UK banks to access funding.
What could happen
 Slow growth in UK;
 Imported goods more expensive;
 UK may create its own path in regulation of
domestic financial services;
 Significant uncertainty.
What does it mean for Alternative Finance?
 Banks still retreating from financing SMEs, more opportunities for borrowers;
 Short term funding opportunities more attractively priced;
 Lack of investment opportunities elsewhere makes alternative finance more
attractive for funders.

Brexit – Corporate sentiment in the market
“What is the impact of Brexit on your plans for obtaining funding from alternative providers?”
0 10 20 30 40 50
Don't know
No impact
Creates opportunities
Limits opportunities
Puts plans on hold
%
Source Allen & Overy, Alternative Finance : A European Profile

Brexit – Investor sentiment in the market
“What is the impact of Brexit on your plans for providing alternative funding to large, medium and small
businesses?”
0 10 20 30 40 50
Don't know
No impact
I will look outside Europe
Limits opportunities to fund
businesses in UK
Creates opportunities
%
Source Allen & Overy, Alternative Finance : A European Profile

The Gibraltar angle
Headwinds:
1. The banking sector contracting;
2. The impact of Brexit.
Tailwinds:
1. Demand for residential lettings continues to exceed demand, offering opportunities for developers;
2. World Trade Centre completed (over 90% occupancy) and Midtown project progressing;
3. There continue to be NO bank repossessions;
4. Unemployment remains below 1.5%;
5. Finance industry continues its organic growth, with exciting new ventures already inbound, boding well for
the future;
6. Gibraltar remains the only highly regulated, low tax, English-speaking centre in Europe.
The unleashing of the Gibraltarian spirit!

Sancus Group Overview
*Excluding Sancus Finance (estimate)
Data source: Sancus Group as at 31/12/16
£578m
Cumulative Loan Book
£162m
Invoice Discounting
Supply Chain Financing
£274m
Asset Backed Loans
£142m
Business Loans
£30m
Proprietary Capital
£3m*
2016 Profits
Ireland Strategic Investment Fund
is an investor in
BMS Finance (Ireland) SARL
British Business Bank
Investments Ltd
is an investor in
BMS Finance (UK) SARL
£152m
Live Loan Book

Our Funding Solutions
Short Term/Ongoing
(1 to 3 months)
 Invoice Discounting
 Supply Chain Finance
Medium Term
(3 – 24 months)
 Asset Backed Loans
 Property Bridge
 Property Development
Long term
(24 – 60 months)
 Intellectual Property
 Mergers & Acquisitions
 Cash Flow
 Mezzanine

A profitable niche lending business operating different funding solutions in multiple jurisdictions.
Corporate Structure
Sancus BMS Group
(Total staff 39*)
Jersey
Sancus (Jersey) Ltd
Company No. 113391
Guernsey
Sancus (Guernsey) Ltd
Company No. 58612
Gibraltar
Sancus (Gibraltar) Ltd
Company No. 112755
UK
Sancus Finance Ltd
Company No. 7485900
BMS Finance (UK) SARL
Company No. 06008835
Ireland
BMS Finance (Ireland)
SARL
Company No. 905187
Isle of Man**
Sancus (IOM) Ltd
Company No. 012528V
**Affiliate* as at 31/12/16
UK***
FundingKnight
Company No. 7534003
FCA Regulation No. Z2928012
*** Will become part of Sancus BMS Group from 30th June 2017

Use of Proprietary Capital
Critical differentiating factor:
 Allows us to underwrite loans;
 Allows us to change shape of credit risk for Co-Funders;
 Ensures we share risk with Co-Funders and have “skin in the game”;
 Ensures we can Co-Fund in every deal to control process;
 Highlights our confidence in our credit process;
 Provides us with the ability to subordinate to Co-Funders to reduce their risk.
Sancus BMS is wholly owned by GLI Finance www.glifinance.com a trading business listed on AIM

A straight forward process which provides:
 Reliability - speed & efficiency of service;
 Transparency - on both costs and reporting;
 Certainty - commitment if borrowers meet clearly defined approval process criteria;
 Simplicity - terms can be customised to suit individual borrower requirements;
 Trust - in a relationship business you know who you are dealing with;
• Opportunity - access to capital in more complex situations than traditional lenders can cope with.
The Benefits for Borrowers

A straight forward process which provides:
 Diversification – via a low correlation to traditional asset classes with returns in excess of those from bonds and cash;
 Impact – assisting the real economy, making a real difference in your local jurisdiction;
 Simplicity – secured participation in a hassle free way with transparent reporting;
 Flexibility – ability to repay monies if circumstances change and interest paid monthly if required;
 Control – Funders can choose the type of opportunity they wish to allocate to;
 Trust – in a relationship business you know who you are dealing with.
The Benefits for Co-Funders

Borrower Characteristics
What we look for in our borrowers, the six “C”s:
 Character – strong moral fibre;
 Capital – holistic approach to understanding a borrower’s total net-wealth;
 Collateral – what is our security;
 Cover – a sensible Loan-to-Value (LTV);
 Capacity – ability to repay and clear repayment strategy;
 Conditions – economic scenarios to understanding impact.

 Straightforward to deal with;
 Speed and certainty of execution;
 Pragmatic application of common sense;
 Ability to review complex scenarios;
 Highly experienced credit team in multiple jurisdictions.
Conclusion

Appendices
1. Case Studies
2. Contact Details

Case Study – Asset Backed Loan for development
 Type/Location: Gibraltar/Company;
 Purpose of loan: bridging loan;
 Loan value: £1.1m;
 Funding: Sancus £28k with £1.072m spread between 3 Co-
Funders;
 Borrower’s Interest Rate: 15%;
 Co-Funder’s Interest Rate: 13%;
 Interest Serviced: Quarterly;
 Term: 12 months;
 Security Value: £2.07m;
 LTV: 53%;
 Security: first legal mortgage over two properties, a debenture from the company and guarantees from the
beneficial owners;
 Repayment strategy: refinanced from traditional lender;
 Completion: May 2017;
 Fees: commitment fee 0.50% & arrangement fee 1.5%;
 All legal fees paid by borrower.

Case Study – Asset Backed Loan for conversion
 Type/Location: Gibraltar/Company;
 Purpose of loan: bridging loan;
 Loan value: £3.87m;
 Funding: Sancus £95k with £2.92m spread between 10 Co-
Funders;
 Borrower’s Interest Rate: 12%;
 Co-Funder’s Interest Rate: 10%;
 Interest Serviced: Quarterly;
 Term: 12 months;
 Security Value: £6.45m;
 LTV: 60%;
 Security: first legal mortgage over the property, a debenture from the company and guarantees from the beneficial
owners;
 Repayment strategy: refinanced from traditional lender;
 Completion: March 2017;
 Fees: Commitment fee 0.50% & Arrangement fee 1.25%;
 All legal fees paid by borrower.

Case Study – Supply Chain Finance
 Engineering business in South of England with turnover of
£120m;
 Needed to source working capital to support new projects in
continental Europe and the UK;
 Sancus provided £2m of working capital through 90 day
supply chain finance programme;
 Extended days payable outstanding by 45 days;
 There was zero cost to our client who was able to gain a
3.5% increase in gross margin;
 Sancus paid approved supplier invoices within 3 days of delivery to our client, allowing the client to negotiate 8%
early settlement discounts;

Case Study – Invoice Finance
 Industrial coatings business based in North of England with
annual turnover of £7m;
 Client had won 2 large contracts creating a need for an
additional £750k working capital;
 Incumbent bank declined to support;
 Traditional invoice finance solutions required control over
the whole sales ledger and restricted the amount of funding
available;
 Fees based on all turnover meant that traditional invoice line was too expensive;
 Restricted funding from traditional invoice finance meant that company would not have sufficient funds to carry out
new contracts;
 Sancus Finance provided a £750k invoice finance line for the 2 new customers only;
 Company generated in excess of 10% contract values and they have now been invited to tender for additional
contracts, ensuring the company’s continued growth.

Contact Details (Jersey, Guernsey, Gibraltar & Isle of Man)
Michael Hennessy
Managing Director,
Sancus IOM
e michael.hennessy@sancus.com
t +44 (0)1624 604101
Matt Watson
Managing Director,
Sancus Guernsey
e matt.watson@sancus.com
t +44 (0)1481 713335
Stuart Hamilton
Business Development,
Sancus Jersey
e stuart.hamilton@sancus.com
t +44 1534 708902
Stephen House
Sancus Jersey
e stephen.house@sancus.com
t +44 1534 708908
Stephen O’Brien
Managing Director,
Sancus Gibraltar
e stephen.obrien@sancus.com
t +350 200 13702
Lino Brydges
Sancus Gibraltar
e lino.brydges@sancus.com
t +00 350 200 13705
Rachael Bajard
Business Development Manager,
Sancus IOM
e rachael.bajard@sancus.com
t +44 (0)1624 604104
Sancus Jersey Sancus Gibraltar Sancus Isle of Man
Sancus Guernsey

Contact Details (UK & Ireland)
Andrew Oppe
Regional Director, London and
South East
Sancus Finance
e andrew.oppe@sancus.com
t +44 (0) 3301 003636
Callum Scott
Regional Director, South
Sancus Finance
e callum.scott@sancus.com
t +44 (0) 1256 657852
Shane Lanigan
Managing Director,
BMS Finance UK & Ireland
e shane.lanigan@bms-
finance.com
t +44 (0) 20 7092 6700 (UK)
t +353 (0) 1 477 3272 (Ireland)
Peter Hudson
Director, Property Finance
Sancus Finance
e peter.hudson@sancus.com
t +44 (0)1256 898000
Sancus Finance
Richard Whitehouse
Sales Director,
Sancus Finance
e richard.whitehouse@sancus.com
t +44 (0) 3301 003636
BMS Finance
Carl Collett
Investment Director,
BMS Finance UK
e carl.collett@bms-finance.com
t +44 (0) 20 7092 6700 (UK)
Jenny Roberts
Regional Director, North
Sancus Finance
e jennifer.roberts@sancus.com
t +44 (0) 3301 003636

Important Information and Disclaimer
Legal Disclaimer (page 1 of 2)
This Presentation (this "Document") relates to Sancus BMS Group Limited (the "Company") and its subsidiaries (the "Group") and has been delivered to you (a "recipient") for
information only. This Document does not constitute an offer or invitation to subscribe for shares or other securities issued by the Group, is not capable of acceptance by any recipient
and shall not form the basis of any contract or other arrangement between any member of the Group (or any other person) and any recipient (in any jurisdiction). Without prejudice to
the generality of the foregoing, the issue of this Document shall not be deemed to be any form of commitment on the part of the Company or the Group (or any other person) to
proceed with any investment.
The information in this Document, which does not purport to be comprehensive, has been provided by the Company and has not been independently verified.
Whilst this Document has been prepared in good faith, no representation, warranty or undertaking, express or implied, is or will be made, and no responsibility or liability is or will be
accepted by the Company or by any of its officers, employees, agents or advisers, in relation to the accuracy or completeness of this Document, the information contained in this
Document or any other written or oral information made available to any interested party or its advisers in connection with this Document, and any such liability is expressly disclaimed.
In particular, but without prejudice to the generality of the foregoing, no representation, warranty or undertaking is given as to the achievement or reasonableness of any future
projections, management estimates, prospects or returns contained in this Document or in such other written or oral information. Each recipient acknowledges and agrees by
accepting this Document that no person has, nor is held out as having, any authority to give any statement, warranty, representation, or undertaking on behalf of the Company. The
foregoing provisions of this paragraph shall not limit the liability of any person in respect of fraud or otherwise as prohibited by applicable laws.
The Company gives no undertaking to provide any recipient with access to any additional information or to update this Document or any additional information, or to correct any
inaccuracies in it which may become apparent.
Any recipient of this Document should note that this Document does not constitute an offer to the public to subscribe for securities in any member of the Group and has not therefore
been approved by any regulatory authority anywhere in the world.
Sancus (Guernsey) Limited is a non-regulated financial services business under the Registration of Non-Regulated Financial Services Businesses (Bailiwick of Guernsey) Law, 2008
as amended by the Registration of Non-Regulated Financial Services Businesses (Bailiwick of Guernsey) Law, 2008 (Amendment) Ordinance, 2008. This law has no effect on the
conduct of business of Sancus (Guernsey) Limited except for the requirement to carry out certain measures in connection with anti-money laundering and combating the financing of
terrorism measures in accordance with the guidance issued by the Guernsey Financial Services Commission from time to time. Sancus (Guernsey) Limited is also registered with the
Guernsey Data Protection Commissioner under the Data Protection (Bailiwick of Guernsey) Law 2001.

Important Information and Disclaimer
Legal Disclaimer (page 2 of 2)
Sancus (Jersey) Limited is registered with the Jersey Financial Services Commission under the Proceeds of Crime (Supervisory Bodies) (Jersey) Law 2008 to carry out the business
of providing lending services, including consumer credit, mortgage credit, factoring (with or without recourse) and financing of commercial transactions (including forfeiting). As a
result of this registration Sancus (Jersey) Limited is required to comply with certain procedures to prevent and detect money laundering in accordance with the guidance issued by
the Jersey Financial Services Commission from time to time. Sancus (Jersey) Limited is also registered with the Jersey Office of the Information Commissioner under the Data
Protection (Jersey) Law 2005.
Sancus Finance Limited and Sancus BMS Group Limited are not regulated by the United Kingdom Financial Conduct Authority or by the Central Bank of Ireland.
Sancus (IOM) Limited holds a Money lending licence issued by the Isle of Man Office of Fair Trading under the Moneylenders Act 1991, which regulates private lending in the Isle of
Man. Sancus (IOM) Limited is also registered with the Isle of Man Information Commissioner under the Isle of Man Data Protection Act 2002.
Sancus (Gibraltar) Limited holds a Moneylender's Licence issued by the Gibraltar Financial Services Commission under the Financial Services (Moneylending) Act 1917, which,
together with the Moneylending Rules 1917 regulates private lending in Gibraltar. Sancus (Gibraltar) Limited is also registered with the Gibraltar Data Protection Commissioner under
the Gibraltar Data Protection Act 2004.
FundingKnight is fully authorized by the Financial Conduct Authority.

Sancus Gibraltar presentation 19th September 2017

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Sancus Gibraltar presentation 19th September 2017