Volume brokers should create relationships with established names in the bridging market, according to Alternative Bridging.
Brian Rubins (pictured), director at Alternative, said: “There has been a plethora of new lenders with a few million, or a few tens of millions to advance, who have come into the bridging market.
“Often, they are syndicated funds of high net worth investors who think the returns from bridging are attractive, but putting funds out is far less complicated than getting them back.
“The crowd funding community has romanced with bridging and development finance. However, some have found it is not so easy to attract the best loans and a number have withdrawn from this type of lending.
“Others are active but their underwriting might be questioned. Hopefully the peer-to-peer lenders will achieve repayment of their bridging and development loans in full and not taint their core business of providing business finance to SMEs.
“It has been reported that the largest growth in short-term lending is for commercial loans and development finance, which established or first team bridging lenders can provide as well as residential bridging, including regulated loans, all under one roof.
“Therefore, the new entrants have not disrupted the market as much as many believe. And where will these new, smaller lenders be when the sun stops shining and dark clouds gather, usually a good time for brokers and alternative lenders to be active.
“The growth in bridging is mainly driven by the absence of loans from the high-street banks and supported by liquidity in the bridging market and this is unlikely to change in the near future.”
