Having seen a successful business model, started from scratch, overcome the various pitfalls that any new sector will have, you would have thought that going into competition with this pioneer would be comparatively easy. All you have to do is offer something a little different and more innovative than what is already available and bingo – the business starts pouring in.
Apparently, this is more difficult than it seems, as the host of new lenders entering the market do not seem to have grasped the concept, and for some reason believe that offering an inferior product range, more complex underwriting criteria and service standards which are certainly no better than those currently available will still result in brokers ignoring their established lender relationships and giving the new lenders their business.
Some of these lenders have also failed to grasp the underlying concept that self-certification loans are actually underwritten on a self-certified basis. Borrowers who progress on this route are generally not able to prove their income levels, so asking for background financial information at the last minute, as I have found with a few of these new lenders, will simply result in the application not proceeding. Let’s be fair – had the client actually had the required financial information, it is likely that they would have progressed with one of the many full status lenders in the marketplace at rates and terms well below what is available on a self-certification basis.
There are exceptions and some lenders have established their niche, are fully aware of where their strengths lie and move forward on this basis. Others still need to establish exactly where they want to be in the market and put together products and service to reflect this. Once a deal fits a lender’s criteria, I want it to move quickly to completion, not be bombarded with additional queries because the lender is not really sure whether they are a ‘true’ self cert lender or not.
These are exciting times in the commercial finance sector and there is room for competition in all areas. It is, however, essential for prospective lenders to have a full understanding of the sector and what is currently available if they are to successfully compete with the established names who have so successfully increased awareness of both their own products and the commercial sector as a whole.
John Ford
Director
Mustard Commercial Finance Ltd
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