Jack Coombs

Why tech is a lender's secret to faster bridging finance



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As more and more of the early players in the bridging market transform into industry goliaths or have been joined by challenger banks, there is a growing sense that the average length of time taken to complete a deal has increased.

As a result, the question of how short-term lenders can be faster and more flexible has become a major talking point.

As the main high street lenders continue to retrench, with little inclination to look at a vast swathe of UK property, the finance providers in the short-term market have become cheaper and more sophisticated as the demand has grown and the corresponding investment levels have increased.

The traditional reasons for bridging (finding speed and flexibility to combat the lethargy and reticence of the high street) seem to be a recurring challenge. The answer to this is technology.

With loan books in the hundreds of millions or billions becoming commonplace, the traditional paper-based systems – which initially sustained many early short-term lenders – simply collapse. 

The challenge is, therefore, threefold:

1. create a front-end system that automates the basics and talks to brokers to quote customers quickly and accurately
2. create a back-end system that automatically completes the simpler tasks and reduces underwriter roles to looking only at the complex elements of the tricky ones
3. ensure that both systems speak to each other and are streamlined.

This is why at Aspen we decided from the outset to focus on tech innovation to help position ourselves as a faster player with big ambitions. We have already seen the results of investing in in-house programmes.

Our proprietary underwriting approach means that we are able to provide illustrative quotes on each case in an average of 14 minutes, with 93% of these initial quotes not changing materially at the formal DIP stage. Of the remaining 7% that do, most are the result of credit data not initially being provided.

These same technologies – founded on sound logic and quantitative data – better inform our underwriters and allow them to be more confident in the high-LTV space, providing facilities at up to 80% LTV for as short a term as six months, all fully underwritten within our three-hour service-level agreement.

Brokers can also produce these quotes themselves answering only 12 questions and instantly reducing the initial quote delay even further to around three minutes. Broker view also allows IFAs to test multiple scenarios instantly by being able to adjust the term and product, as well as in-hand amount (with fees fully costed) in order to present multiple scenarios to the client to give as customised a quote as possible.

This is just on the very front end. Technology also has a role to play in chasing, keeping all parties informed, removing data duplication and reducing the time taken in each task through the lifecycle of a loan.

The upshot of this is that it leaves more time for complex decision making and underwriter discretion over the real obstacles. It leaves people to do the real work of completing quality deals with greater customer attention. 

This enables Aspen to meet each borrower, visit every site and get results that make for happy customers, brokers and stakeholders alike.

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