The specialist lender, known for providing bridging loans and buy-to-let finance, has removed most information about its services from its website following the announcement.
The collapse has sparked uncertainty among landlords and property developers who rely on short-term bridging loans to purchase or refurbish properties before securing longer-term mortgages.
He added that the administrator’s investigation could also lead to tighter lending practices across the sector as firms place greater emphasis on underwriting and asset verification.
Adam Tyler, chief executive of the Bridging & Development Lenders Association (BDLA), said the administration appeared to be an isolated issue rather than a systemic problem.
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“The specialist lending sector remains robust and well capitalised and continues to provide vital liquidity to the UK property market,” he said.
“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.”
Market Financial Solutions founder Paresh Raja insisted the move was not due to the underlying strength of the business or its loan book.
“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,” he said.
Raja said entering administration would provide a structured environment while the company works with administrators to explore possible solutions.
“I remain fully committed to preserving value and doing everything possible to support a positive outcome for all stakeholders.”
The firm said the decision followed a temporary restriction on access to its banking facilities.
For borrowers currently using or applying for bridging loans through MFS, advisers say the immediate priority will be understanding how existing loans will be managed while administrators review the company’s operations.
