By their very nature brokers are entrepreneurial and react fast to changing market conditions. Despite this, it seems that the speed at which the bridging market is evolving has not necessarily been matched by their awareness of just how many funding options are available to their clients.
Splicing and dicing funding options isn’t easy. It’s technical and can require several skill sets wrapped up in one go. In our experience, awareness of which options to combine and how is currently highest among a small minority of brokers with deep development finance expertise. Development finance is a complicated sphere of property finance. For these brokers, however, combining bridging and development finance options can be second nature.
For them, it is not an issue to help a borrower to bridge the purchase of land without full planning or looking for a planning amendment, then to move onto development finance once the desired planning is secure. Alternatively, they may create a strategy that uses bridging finance to secure an opportunity at auction, giving the borrower time to mobilise a development team before transitioning on to longer-term and lower-cost development finance.
For the rest - by which I mean the vast majority of brokers - complex finance combinations like these are less familiar, meaning valuable opportunities may be missed.
The bridging world is evolving fast. As more bridging lenders enter - or re-enter - the market, the breadth of products available on the market is growing at pace. To remain competitive, bridging lenders are bringing to market more tailored products that we’ve ever seen before.
This tailored product emphasis is a remarkable advancement in the bridging industry and ought to be celebrated. But with this advance comes responsibility. Learning the funding options should not become a burden for brokers to shoulder alone. As the instigators of this change, lenders must take time to educate and illuminate brokers on what’s coming available.
At LendInvest, we take this responsibility seriously. We work closely with our brokers to ensure they are kept informed with the relevant and practical knowledge they need to make the best funding recommendations. On training days throughout the year we give brokers hands-on demonstrations of the products we are developing and the strategies to bring them together with one another or with longer-term products available with other lenders.
As a fintech company, technology is at the heart of our business. We have created an online system where the broker can give indicative terms at the point of sale whilst with their clients. As the case progresses our system will allow the individual to track the progress online. This is backed up with a case manager as and when the broker needs to speak with us.
In a post-crisis world, bridging is taking an ever-larger place as a critical, often essential, piece in funding strategies for borrowers. Its ability to fit together neatly with longer-term funding options will only become better understood and appreciated.
While the onus now may lie with bridging lender to ensure that their product offerings - and the way they fit together as part of multi-faceted funding strategies - are clear, accessible and relatable, the brokers that reap the greatest benefits will be those that engage with lenders in open, ongoing dialogue. Both sides have insights and perspectives of equal value and together we can refine our products to reach industry-leading propositions that suit every borrower.
