Market Financial Solutions has made an application to enter administration as it works through an "unexpected banking-related issue".

The property finance lender said the step has been taken to "protect employees, investors and stakeholders".

Market Financial Solutions was founded in 2006 and over its lifetime has managed more than £1.2bn in cumulative lending. At its peak, the lender’s loan book reached approximately £2.4bn.

The decision follows a temporary restriction on access to Market Financial Solutions’ banking facilities, arising from a procedural matter with its banking provider.

The lender stated that while the underlying business remains asset-backed and operationally sound, its board decided that placing the company in administration was the "most responsible way to safeguard value and provide stability", while allowing operations to continue under supervision of the court.

Founder at Market Financial Solutions, Paresh Raja, described the move to enter administration as an "extremely difficult moment" for everyone connected to the company.

He added: "The current situation does not reflect a failure of the underlying business or the quality of our assets, but rather a technical and procedural impasse that has temporarily limited our access to everyday banking facilities.

"My priority is, and always has been, the people behind this business – our staff, our investors and our creditors. Entering administration allows the company to be protected while we work openly and cooperatively with the joint administrators to find a way forward. I remain fully committed to preserving value and doing everything possible to support a positive outcome for all stakeholders."

The Bridging and Development Lenders Association has said that it will continue to monitor the situation and remains committed to upholding the "highest standards of professionalism and stability across the short-term lending industry".

Chief executive officer at the BDLA, Adam Tyler, concluded: "Our immediate thoughts are with the professional and dedicated team at Market Financial Solutions, as well as the many brokers and borrowers who have built long-standing relationships with the firm over nearly two decades.

"Market Financial Solutions has been a prominent and active participant in our sector, and we are encouraged by the management team’s proactive steps to seek a structured environment through administration to protect the business’s assets and ensure the continuity of loan management and servicing.

"The specialist lending sector remains robust, well-capitalised, and continues to provide vital liquidity to the UK property market. While any instance of a lender entering administration is significant, it is important to distinguish between a systemic industry issue and a specific operational challenge."

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