How using a packager can benefit your business
Packagers, or master brokers, are a key part of the commercial mortgage landscape, but the ways in which a packager can add value to your business are not always fully understood. So as September approaches and the market gathers pace, what do brokers need to know about packagers and how they can help complete more business?
Packagers deal with a range of specialist products from short-term loans (STLs) and buy-to-lets to commercial mortgages, secured loans and development finance. If a broker generates a lead on a case involving an STL, but specialises in residential mortgages for example, they could miss out on the opportunity due to the fact it does not form part of their core business. Their knowledge of how to place and process that case would not match the experience of a specialist packager who works on these types of cases day in, day out. By using their market knowledge and experience, a packager can help the broker with the STL deal, allowing the broker to take advantage of a greater variety of business, whilst not having to focus their valuable time on the processing of the application.
The ownership of the client always remains with the broker but as packagers will work on cases from initial enquiry through to completion, the broker is free to focus on winning new business and completing other deals. There is significant added value in having a packager on your side when approaching new cases. An experienced packager will assesses each enquiry, finding the most suitable solution before putting together a full pack, tailored to each lender’s particular requirements. It’s the in-depth knowledge of each lender’s criteria that enables them to find the right source of funding and manage the process right through to completion of the loan.
Development finance is a good example of an area where brokers could enhance their offering by working with a packager. Development finance applications can be harder to place, being a complex and niche market where lenders have varied and sometimes not well published criteria. Investors will always look to source the best possible terms when securing development finance and packagers will use their expertise to achieve this.
Relationships with lenders
Like with so much in life, relationships are key. Lenders obviously prefer to receive well-packaged applications so valuable time isn’t wasted. Packagers’ strong relationships with a variety of high street and specialist lenders mean that they can add real value to brokers, delivering every time by getting deals paid out quickly and efficiently. If you’re considering using a packager, look at how long they’ve been operating – there’s no substitute for experience. Good conversion ratios are so important and the better the mutual understanding between a packager and the lender, the better the outcomes in terms of conversion ratios.
A point worth noting is that they also help to extend relationships with lenders. Where brokers may face barriers when approaching certain lenders with restricted panels, packagers will be able to offer access to these lenders. This means they are well placed to secure better terms for brokers and investors.
Packagers can play a considerable role in alleviating the time pressures associated with progressing a deal to completion. For example, they know that the legal process is often one of the most time-consuming parts of a deal. On cases which have perhaps become protracted, where two sets of lawyers are working together, they will get to the heart of the issue and seek to rectify the problem. This means brokers can get on with generating new business leads rather than worrying about legal delays.
Packagers can significantly enhance the service for brokers by reducing their paperwork burden. They can take care of all the administration, collating the relevant documentation required by different lenders and ensuring everything is packaged correctly to minimise delays. It’s up to a broker to let them know how hands-on they wish them to be but a full support structure is available, which can mean simply passing over the details, receiving regular updates and, importantly, the commission once it is all done.
To conclude, a packager is there to help and support brokers. By giving brokers access to their specialist knowledge across a range of products, allowing them to save time, minimise their paperwork and make the most of their strong relationships with lenders, packagers can enhance a broker’s offering and improve the quality of their applications. Rather than being seen as a last resort when a broker has exhausted their network of lenders, packagers should be viewed as a valuable addition to a broker’s business.
Lucy Hodge, Director, Vantage Finance