10 things to look for in a bridging lender

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Charlotte Rutter Roma Finance

With so many lenders vying for your business, how do you choose one? asks Charlotte Rutter, head of comms & networks at Roma Finance

There are now around 300 bridging lenders in the UK market – maybe more.

The staggering rise in competition over the last few years is great news for brokers and borrowers, as it has the potential to drive up standards and push down costs.

By following some of the tips below you can boost your chances of choosing a lender that operates in a clear, fair and transparent way and will do the very best for your customer.

1. Real-life recommendations

Word of mouth recommendations are the gold standard when it comes to choosing a bridging lender. Speak to other brokers, locally, online or at events to see which lenders they recommend (and which they don’t).

2. Membership of a professional body

Is the lender a member of a trade association? This can give you a good steer about its commitment to raising industry standards. Look out for membership of the Association of Short Term Lenders (ASTL) or lender partnership of the National Association of Commercial Finance Brokers (NACFB) or Financial Intermediary & Broker Association (FIBA) – or all three.

3. Speed

Speed is one of the most important features of a good lender. Look for those that can tell you their current turnaround times and have processes in place to give you certainty of offer as quickly as possible.

4. Service

Good service is very hard to judge before you’ve submitted business to a lender. But feeling valued from the off is a good start. Whether that manifests as the phones being picked up quickly, knowledgeable experts, a willingness to help, or all three, you want to feel like an individual not just a case number. It’s worth calling a lender you haven’t used before to chat through their products and processes. The best will be more than happy to talk you through their proposition, giving you a good gauge of their approach to service.

5. Dedicated point of contact

When you submit a case, the last thing you want to do is have to explain the whole project to a different person every time you call for an update. Having a dedicated point of contact who knows you and your customer’s case is hugely valuable, as it frees up your time to get on with helping customers. Ask the lender if you will have one point of contact and their direct number.

6. Bespoke underwriting and structuring

If your customer’s case is complicated you want a lender that has experience in structuring loans to meet the needs of the project, not just offering an off-the-peg solution. Ask the lender if they offer bespoke arrangements that they can structure after getting under the skin of the project. Not all will be able to do that, but it could be more appropriate for your complex cases.

7. A focus on exit strategy

The best bridging lenders look for a clear, realistic and fully costed exit strategy before approving a loan. At Roma we won’t lend on a project that doesn’t have a robust plan, costings, schedule of works and exit strategy, and neither will other reputable lenders. It’s a big red flag if your lender isn’t asking questions about your customer’s exit strategy.

8. Transparent fees and charges

The bridging sector still hasn’t quite shaken off its reputation among some brokers for high fees and opaque charges, despite many lenders and trade organisations working really hard to boost standards in the sector. They ensure that fees and charges are fair, transparent and understood by the broker and the borrower. Look for lenders that are upfront about all fees, including those charged if your customer cannot redeem in full and on time.

9. Effective technology

Bridging finance is specialist by nature and that’s given rise to the myth that it can’t be automated. Some aspects can’t, but many parts of the process can be improved by effective technology. It frees up our time to work on complex cases and your time to deal with more customers.

10. Specialist expertise

An established lender isn’t necessarily better than a new brand. But most brokers want reassurance that there’s a level of expertise within the business to overcome hurdles and deal with inevitable problems. Look for lenders that have a firm foundation of lending experience, have continued to thrive through different economic cycles and have colleagues with the specialist knowledge and skills to support your customers.