Rising enquiry volumes, but what about deal quality?

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April is shaping up to be one of the strongest months of lending we’ve seen at Inhale Capital.

On the surface, that points to a healthy and active market. But looking more closely at the types of enquiries coming through, a different trend is emerging, one that is worth paying attention to.

We are seeing a growing number of lower-quality enquiries entering the market.

These include part-complete developments without clearly defined exit strategies, re-bridging cases where there has been no meaningful change in the borrower’s position, and second charge requests driven more by wider business pressures than by the underlying property fundamentals.

This is not happening in isolation.

From conversations with brokers and other lenders, similar patterns are appearing more widely across the market. The current economic backdrop is clearly influencing borrower behaviour. Persistent inflationary pressure, a higher-for-longer interest rate environment and subdued transaction volumes are all feeding into how deals are being structured and presented.

There is also a broader layer of uncertainty at play. Ongoing geopolitical tensions and more fragile capital markets are contributing to a more selective lending environment, where access to liquidity is no longer as straightforward as it may have been in previous years.

What we are likely seeing is a combination of factors.

Some deals originated in a very different environment, one characterised by lower rates and greater liquidity, are now reaching a point where refinancing is more challenging. At the same time, borrowers and brokers are widening their search for funding as traditional options tighten. In other cases, increased pressure on cashflow is leading to more opportunistic or necessity-driven borrowing.

The result is a shift in the balance between volume and quality.

Higher enquiry volumes do not necessarily translate into more viable deals. Instead, they place greater emphasis on credit discipline and underwriting clarity. In the current market, the ability to say no is just as important as the ability to say yes.

At Inhale Capital, strong volumes do not change our approach. If anything, they reinforce it.

We remain focused on clearly structured transactions and credible, executable exit strategies. These fundamentals are what ultimately determine whether a deal can be delivered successfully, regardless of broader market conditions.

The opportunity in the market remains. Demand for bridging finance is still there.

But selectivity is becoming increasingly important.

Over the next 12 to 24 months, performance is likely to be defined not by how many deals are seen, but by how effectively lenders differentiate between those that are viable and those that are not.

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