Harriet Smith

An honest conversion conversation is needed




According to the latest data from the Association for Short Term Lenders (ASTL), borrowers applied for bridging loans worth a total of £5.96bn between January and March 2019, up 6.9% on the corresponding months in 2018.

However, the value of bridging completions dropped by 13.1% to £898.5m in the first quarter, compared with the previous year.

Here are the reasons why an honest conversion conversation is needed to improve outcomes.

There’s no denying that the recent ASTL figures make for interesting reading, and not for all the right reasons. As applications are going up, it shows that bridging as a finance option is becoming more accepted, but such a large drop in completions clearly shows that the product is still not completely understood.

At Crystal Specialist Finance (CSF), our internal figures show that bridging applications are up 15%, while completions increased by 5% in January to March 2019, compared with 2018, so while better than the ASTL numbers, it still follows the pattern that applications don’t relate to an equal increase in drawdowns.

Focus on the positives

The industry has done a very good job in raising the profile of bridging finance, and as such this is now a product accessed by more and more brokers.

However, many still believe that a bridging loan is a one-dimensional product when in fact every lender has different processes which will ultimately impact on an application. The huge variety of products on offer means there is a solution to most clients’ requirements, but brokers need to know exactly where to turn.

It’s important that brokers understand the lender they are working with — or partner with a specialist distributor in order to give the case the best chance for completion.

Warts ’n’ all

The process of discovery has always been an issue in specialist finance and even more so in bridging. Lenders are more flexible than in many other financial sectors and can take views on various scenarios, however, they still need to know all the required information from the outset.

There is still a tendency to withhold information that may be perceived as unhelpful to an application, but due to the far more diligent processes that lenders now have in place, these will be uncovered and will either stall or terminate a submission. Naturally no one wins in this scenario.

The professionals

Make sure you are working with the right partners, and here one cog in the chain stands out above most — aside from the stunningly important specialist finance distributor — the solicitor.

A solicitor with experience in short-term finance will understand from the outset exactly what is required to get the application completed in a timely manner, one that does not will most likely delay any transaction unnecessarily. We have our own panel whom we recommend, but this is not always heeded advice.

At CSF, we thoroughly research the market daily for the best products and benchmark ourselves against lenders to ensure our service is the same or better than what you could receive directly.

Let’s talk

Bridging finance is a great solution to a number of clients’ problems, but it is only by working together with all parties involved that we can bridge the gap between applications and completions.

So, let’s have an open and honest conversion conversation with brokers and their clients, because if we can address these issues then everyone’s a winner.

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