“THE credit crunch has probably been the best thing that’s ever happened to us,” said Gregory King, a 39-year-old Glaswegian entrepreneur, whose corporate moneylending empire grows bigger by the day.

King is one of the lenders stepping in to fill the gap being left by Britain’s banks. Using capital raised from family offices in Geneva, private banks and hedge-fund investors, he offers bridging finance to property investors - for a steep fee.

King is making hay while the banks whine. His deal volumes are 400% up on 12 months ago, he said. It is also making him incredibly rich. Although he has yet to appear on The Sunday Times Rich List , he is estimated to be worth close to £200m.

While banks are reining in credit lines, he is raising two new funds that would give his Mathon lending business up to $1 billion (£498m) of fire-power. He said he already had backing from his investors.

“Last year was a very tough year for hedge funds, as everyone knows,” said King. “I knocked in returns to my investors of 13.7%, after fees.”

Mathon is funded principally through an Isle of Man registered hedge fund. From his investors’ perspective, that’s what the business is - a hedge fund with reliable returns.

King said his typical customer was a property professional - a surveyor, architect or lawyer - who wants to start doing his own deals.

Clients are charged an interest rate of 2% a month – equivalent to an annual percentage rate of almost 30%. There is also a 2% arrangement fee.

Most of King’s deals fall between £2m and £5m, although he will lend anything up to £20m. A Mathon loan typically lasts for six months.

He insisted that nothing he touches is in any way sub-prime. King said that he and his team were simply behaving like “old-fashioned bank managers”.

Everything is lent against property, with a maximum loan-to-value of 70%. But in his valuations, King is more willing to take account of development upside – which is where he differs from the banks.

Where banks can take up to eight weeks to make a lending decision, King promises an answer in six to eight days. All he needs is time for his team of in-house surveyors to do their due diligence.

“I am not a financing cost,” said King. “I’m the cost of getting the deal done. My typical client is going to earn so many million pounds on a deal. If he has to pay me a couple of hundred thousand pounds to get the deal done, then, frankly, he couldn’t care less. I am the only guy that will help him get this over the line.”

Mathon was touted for a possible flotation last year, which gave the company a suggested value of about £180m. A big investment bank offered to buy half the business, according to King. In the end, he took in three new external investors and kept the company private. Other potential investors are still knocking on his door.

Mathon takes its name from the gold lender in the ancient city of Babylon. King’s own name has a similar resonance in his native Glasgow. He is the son of the bookmaker Hugh King. His cousin is Stefan King, who owns and runs most of Glasgow’s prominent nightclubs and bars, and regularly causes a public outcry - most recently over his plans to build a nightclub in Glasgow’s botanic gardens.

Moneylending has been in the family since his great-grandmother offered loans to Irish immigrants from her boarding house in the Gorbals.

“They talk about pay-day loans in America,” said King. “I tell all my American investors about how it was my great-grandmother who invented them - she just didn’t call them pay-day loans.”

Although he worked in the bookmaking business to fund himself through university, King is a trained lawyer who worked for the Glasgow firm McGrigor Donald before setting up his own businesses. He was one of the junior solicitors who worked on the flotation of Celtic football club.

Now that the business is growing, King is taking steps to make Mathon a more conventional institution. He has big plans. And he is working on some big hirings.

“We made money on the way up, and we’re making great money now that it’s come off slightly,” he said.

“The toughest time for me was when we were at the top of that pyramid and the likes of Northern Rock were shovelling money out to anyone who had watched four editions of The House Doctor on Sky TV.”

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