‘Brokers should be able to demand certainty and transparency in bridging’
By Damien Druce -
I believe that when brokers submit applications they have the right to expect certainty that deals will be honoured after being given a positive response to an enquiry.
Seeking short term finance should be a lot easier then it actually is. Given the urgency with which funding is required in so many cases, too many brokers are still being left high and dry when a lender says ‘yes’ in principle, only to turn a case away or offer funds at an inflated rate.
Provided the initial case facts are verified and the valuation is correct, there should be no excuses for any lender to reject a case.
The problem lies in those lenders saying yes to everything being offered and then cherry picking only the cases they want.
At Black & White we recently had a case to enable an experienced Bristol based developer to purchase a property in Bristol to convert into a new eco-home.
Our introducer had dealt with another lender and experienced difficulties with getting the certainty of funding, subject to valuation, he would need to purchase the appropriate property when it came along.
After discussions with the B&W team the broker and his client were convinced that we would deliver the level of certainty required to proceed with confidence.
Having found a suitable property, the ongoing development will turn a tired car park covered in tarmac with no opportunities for wildlife, into an eco-home with a flat ‘living’ roof, providing a habitat for insects and other fauna and flora.
The initial valuation for the property was confirmed at £375,000 with an estimated GDV of £1,200,000.
The loan amount over 14 months for the development is £713,827.40 with the intended exit being the sale of the eco-home.
This is just one example of how choosing a lender has become such a lottery for brokers and their clients. However, it does not have to be so.
There are lenders who practice what they preach and honour their promises, unfortunately there is still a strong cynical lender attitude that needs to be eradicated and will only happen when more brokers vote with their feet.
Damien Druce is the Commercial Director at Black & White Bridging. Damien has been involved in specialist lending for over fifteen years, he is passionate about intermediaries and the value they add for lenders. Damien is keen on transparency and driving standards so that borrowers get the best outcome every time.