The recent ASTL/FIBA round table reported in Bridging & Commercial revealed that access to decision makers varied hugely amongst lenders. Points raised included that brokers don’t always get to speak to the people they need to and sometimes get passed from person to person which really slows down the process. Other lenders were reported, not only to take a considerable time to get to a decision, but then change their mind at the last minute letting down both the borrower and the broker.
If all of these things are true then the lenders carrying out these practices are bringing the bridging industry into disrepute. And if you are a broker who has been on the receiving end of these shoddy practices, then you need to start using a different lender. It is clear that when it comes to bridging that not all lenders are created equally!
If we take things back to basics then one of the key reasons a borrower wants a bridging loan is to get access to short term finance rapidly. This is often in order to take advantage of a deal that the borrower may lose if they don’t move quickly. If a lender therefore holds this process up, through no fault of the borrower or broker, it can put this deal in jeopardy. This is amplified if a lender first says yes and then changes their mind.
The key USPs of a bridging lender used to be speed of turnaround and excellent service. To achieve that, access to a decision maker and surety of decision is surely a must. It is clear this hasn’t been happening in all cases however, not only from brokers’ experiences at the round table but also the number of cases that come into Hope Capital after another lender has let the broker down or cannot provide the flexibility that the borrower requires.
Hope Capital always provides direct access to an underwriter or a key decision maker and the broker keeps that contact for the duration from application to completion. This means we can process a case incredibly quickly. What is more, when we say yes, as long as all information has been declared at the outset, then yes really does mean yes.
The only thing that will hold the process up for any lender is if the borrower doesn’t declare all the details accurately at the start of the process. If a case is getting close to completion and only then the lender finds out that the borrower has some undeclared CCJs for example, then that will inevitably delay things. Brokers can obviously play a key part here in ensuring the borrower understands the importance of being open and upfront right from the very beginning.
Any broker who has done this and has still been let down by a lender or who is not getting the service or turnaround times that their clients need, really needs to shop around and use another lender however.
If you are shopping around, a key thing to look for is whether the lender is privately funded or not. One issue that was raised is the role of credit committees and how much they can slow things down. If you use a privately funded lender then this is never an issue as the credit committee will be held internally often considerably cutting down the time it takes to arrive at a decision, so the borrower receives an answer more quickly and yes really does mean yes.