MFS collapse has tightened funding, industry warns
14 October 2026
The collapse of Market Financial Solutions (MFS) has prompted a tightening of funding appetite across specialist lending, industry figures have warned.
Speaking during a lender panel at the Brightstar Specialist Lending Expo 2026 at the London Stadium on Wednesday 7th October, MT Finance chief executive Joshua Elash said he did not believe the issues surrounding MFS pointed to a systemic problem among specialist lenders.
Instead, he said the greater concern was the response from the capital markets and the subsequent reduction in appetite to fund the sector.
Elash said: “Is there a systemic risk that this alleged specific type of activity is occurring or is prevalent? No, I don’t believe that there is.”
He added: “Where does the real risk lie off the back of this? It’s the impact it has on the capital markets, and what we’ve seen is that there’s a tightening of credit appetite.”
Elash said some major institutions had either withdrawn or significantly reduced their appetite for providing funding to specialist lenders.
He warned this could particularly affect smaller and medium-sized lenders without diversified sources of capital.
Elash said: “Smaller lenders, or even medium-sized lenders who don’t have diversified capital stacks, are going to now really struggle to expand their capital stacks.”
He said lenders reliant on a single funder could also find themselves more exposed to changes in that funder's requirements, including demands to reduce loan-to-values.
“It’s also going to be harder for new entrants to come and raise capital funding from the capital markets because people are scared,” he added.
Keystone Property Finance chief executive David Whittaker said lenders had also had to strengthen systems and processes following events surrounding MFS.
He said greater information sharing and checks across different funding arrangements were now necessary, with lenders having to demonstrate stronger oversight of assets and data.
Whittaker said: “If you’re an originating lender with your own balance sheet or dependent on other institutional counterparties, you’ve got to tighten up your systems.”
However, he warned that the additional checks and systems being introduced came at a cost.
“There’s a cost for all this, and the consumer, be it a buy-to-let landlord or the consumer, ultimately always pays,” he said.
