Tips for getting complex deals across the line

By Oli Bland 30th November 2022

Black & White’s Head of Lending, Oli Bland gives his tips for getting complex deals across the line. 

The current market presents challenges to borrowers, brokers and lenders alike.

What makes a case complex?

I would say anything which is not fundable by the high street or challenger banks could be classified as “complex”.

This can include issues such as the security being of non-standard construction, potential risks with the title, the appraised valuation of the asset is of a non-red book methodology or the client having adverse credit.

All manner of elements to a transaction could deem it “complex”, but a good yardstick to use is “Can this be funded by a high street lender or a BTL funder?” If the answer is no, then it is most likely a complex case requiring a bespoke solution.

Understand the borrower and their transaction

Asymmetry of information between the client, introducer and lender results in deals failing to complete!

When considering the most appropriate lender for a given transaction there are a few elements which are fundamental in determining the most efficient and cost effective solution.

When first speaking with a client I get to the bottom of a transaction as quickly as possible and question any element which could potentially result in the deal not completing.

If I can give the client a no on day one, at least I have saved both their time and mine!

You need to know:

The true purpose of the finance
The borrower’s financial situation, including credit and source of wealth
The client’s net asset and income position
The details of the asset to be used as security
The required LTV
The viability of the exit strategy

If you understand the above points, there is sufficient information to determine where a deal can normally be done. You’ll just need to…

Choose the right lender

A lot of lenders operate a box ticking methodology. By its very nature, this methodology cannot be applied to complex cases.

In order to complete such a transaction a bespoke solution is often required, and this is something which only certain lenders will look to offer.

As such, the selection at the outset of a lender suitable to the specific requirements is essential to avoid wasting time.

You need to find a lender prepared to look at a deal holistically and find such a solution, this tends to result in a more expensive yet highly tailored facility.

Using lenders able to operate in this way will mean you are less likely to experience a change in terms, or rejection after the ball has started rolling.

These lenders do exist and if you need a short term or temporary solution, Black & White Bridging is one of them!

Make sure your borrower chooses the right solicitor

When you’ve done the hard work to get a deal agreed, the last thing you want are solicitors who hold things up.

It’s therefore important to encourage your borrower to use firms familiar with the transaction you’re trying to complete, along with any gating requirements specific to that loan type.

For example, with bridging, they must understand just how quick these transactions usually need to be.

Lastly, try and put yourself in the place of the underwriter. What would you need to know about the client and the property to allow you to make an offer?