Developer warns of unscrupulous lenders
Dean Martin, property developer and owner of much-acclaimed Maids of Honour bakery, had put down a sizeable deposit on a house in Kew, South West London and spent a considerable amount of money refurbishing and upgrading it with a view to selling it on.
However, the developer needed a bridging loan to cover him while he sold the property. After being let down at the eleventh hour, as a result of an underhand practice employed by some lenders dubbed ‘pretend to lend’, Dean turned to Fincorp.
Fincorp was able to advance the £1.2million required in just five days. Without this Dean would have lost, not only the property and his deposit, but the money spent on the refurbishment too.
Now Dean is warning other developers of the problems that can occur when using untrustworthy lenders.
“The buzz phrase in the market at the moment is ‘pretend to lend’,” says Dean. “Some bridgers are actually making their money on this. They charge an arrangement fee up front so they’re promised money regardless. Because it’s so difficult to get funding at the moment these unscrupulous lenders are taking advantage of the desperation out there by getting these people to think they’re going to lend. They can actually make more money out of pretending to lend.”
The lenders in question take the fees then find reason not to follow through with the loan, thus keeping the fees without actually delivering any service.
Dean says this is a practice he has witnessed on several occasions.
“There are quite a few companies out there who are putting themselves forward as being really good bridgers and they’re not; this practice needs to be stamped out,” he says.
Dean advocates working with a bridging lender that you have built a relationship with. He says his longstanding relationship with Fincorp, as well as the lender’s transparent, no upfront fees approach, means Fincorp will now be the lender of choice for him.
“At the end of the day bridging is all built on trust,” he says. “And it works both ways. I think Matthew (Anderson, Fincorp director) had an element of trust in me too, which is really nice. Matthew pulled out all the stops for me. We will never go anywhere else.”