Standing out from the crowd in a highly competitive lending space

By

Gary Bailey, Managing Director, Hope Capital

The bridging finance industry is growing at a rapid pace, with a variety of lenders entering and making their mark in the industry. So, that’s a great thing surely?

Well, this suggests that bridging finance, and specialist lending as a whole, is increasing in popularity, and in turn, the more the competition, the more awareness of the industry, which of course is fantastic.

Healthy competition is also great in any business setting as it motivates you to do your best, forces you to focus on your core audience and inspires innovation.

However, with increased competition follows the need to differentiate yourself from others in the market.

Hope Capital was established over ten years ago, when our CEO, Jonathan Sealey, noticed there was a gap in the market for a niche, specialist short-term bridging loan provider.

Since then, the industry has grown rapidly, with some lenders rightfully securing a great reputation in the market and unfortunately others, not being so successful.

The best lenders stand out in the industry because they recognise the importance of prioritising product innovation and providing an excellent service.

Things such as taking the time to walk through the bridging finance process with the broker, ensuring they have a full understanding of what is involved and what the best option is for their client, cannot be underestimated. This is especially important if their core business isn’t short-term loans.

Something we have always stood by at Hope Capital, is that delivering an excellent service outweighs everything else.

While some lenders choose to solely focus on low rates etc, if a lender can’t provide a good service to accompany their offering, then the likelihood of that broker returning for future business is highly unlikely.

Owing to the growing competition between lenders in the bridging finance space, naturally, LTVs are rising and rates are falling.

It’s important to remember though that while low interest rates are a great benefit to the borrower (if the circumstances are right) and can make a lender stand out, this should not sacrifice product innovation or service quality.

In addition, the borrower needs to look at the overall cost of the loan, including fees and admin costs, as well as management fees when the loan has completed.

In most situations the broker and their client will be looking to secure a bridging loan in a timely manner. Therefore, the importance of having an experienced team, as well as processes and technology in place, which can speed up the deal, are crucial.

Ultimately, having the confidence that the deal with go through on time and an excellent service will be delivered, is often far more important than trying to beat your competition by simply providing low rates.

A bridging lender’s product offering is also key when standing out in the crowd. At Hope Capital, we are constantly looking at the marketplace, to check what is in demand and what our competitors are offering.

This enables us to be in a position where we can then create and deliver a range of highly competitive products which reflect the current feedback of brokers and borrowers.

In summary, lenders are continuously looking to differentiate themselves through their product offering, distribution network and service standards.

However, competition will be a part of any business lifecycle and should be nothing but inspirational in this sector.

Healthy competition leads to better products being developed, faster product upgrades as well as product innovation.

This is everything which is needed in the bridging finance industry and ultimately, will help to broaden the appeal of the sector, as well as drive awareness of the specialist short-term lending market.

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