Matthew Tooth

Versatility of funding is what sets quality lenders apart

It's been an exciting year for us on the funding front this year, particularly with the business most recently securing agreements with the likes of National Australia Bank and HSBC for our growing suite of mortgage products.

There are plenty of benefits to brokers that come from lenders building such a diverse range of funding sources. The first is simply the security of funds. Brokers have seen first-hand how working with lenders who only have one or two funding sources can lead to serious issues should those dry up.

We know from our conversations with intermediaries how frustrating it is when a lender is forced to suddenly close the shutters, and that finance which the broker thought was secured for their client disappears. 

That’s why now, more than ever before, advisers are paying attention to where lenders are getting their funding from — and how likely it is to last — as part of that advice process.

But there is more to it than simply having a big pot of money at your disposal. Building a diverse funding base also allows lenders to take a more flexible approach to their activities, helping brokers and their clients with a wide variety of different projects, from small to large — even those that might fall outside their normal criteria.

Embracing flexibility

This is certainly an approach that we have embraced at LendInvest.

Like any responsible lender, we have very clear guidelines for the sort of cases — and the size of loans — that we are able to consistently work with. However, we’re well aware that no two loans are the same, and we will always get special cases that don’t necessarily fit the mould. 

For example, if we have a borrower that we have worked with before, who has a strong track record and we trust to deliver, then of course we will look at the case carefully, even if it falls slightly outside of our normal lending guidelines.

It is with these cases that we must be able to tap into a diverse funding base, with a wide range of requirements when it comes to loan criteria. 

At LendInvest, we have a strong base of repeat borrowers, which is a huge vindication of our approach. And because they keep coming back, we have a good sense of what sort of projects they can deliver, on budget and on time.

This also comes down to relationship management. As a lender, we have put a lot of time and effort into building an experienced team which understands how to work closely with our intermediaries and borrowers to deliver the personalised help and support that can ensure a project goes off without a hitch. 

It’s precisely because we know how to develop and manage those relationships that we are able to take a more flexible approach with our lending, delivering loans that meet the exact needs of our borrowers.

Underwriters are hugely important too, of course. Experienced underwriters, who truly understand risk and don’t simply follow a tick-box approach, can see those cases where a little more flexibility can truly pay off for everyone involved.

Meeting the needs of different borrowers

The specialist market has never been stronger, with brokers now enjoying a host of lenders they can turn to when they have a client that sits outside the mainstream, whether that’s because they need short-term finance or because they have a more complex income set-up.

But it’s not enough to simply serve a small niche which a broker may only need once or twice a year. If lenders want to win the business — and loyalty — of brokers, then they need to go further.

That means building the expertise in-house to be able to deliver across a wide range of different projects, from the very short term to more lengthy deals, and across a decent stretch of loan sizes.

And it means trusting that expert staff to spot the potential of cases that might fall outside the norm, but which have the potential to deliver for all involved parties.

It’s no secret that the high street banks are sharply limited in what they can do within the specialist space, lumbered with legacy tech and meandering processes. 

This has created a wonderful opportunity for nimble lenders, but we cannot afford to rest on our laurels. We will be judged not just on our interest rates, but on how versatile we can be.

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