Have faith in the short-term market!

Article provided by Jonathan Sealey, CEO at Hope Capital for use in Specialist Lending Solutions.

From crumbling house prices to lack of confidence, the property market currently seems like quite a gloomy place. But underneath it all, you have the specialist short-term market…

While it may seem the economy is taking a battering, industries like the bridging finance sector are doing remarkably well. We of course can’t speak on behalf of other lenders, but during the first half of this year, we experienced our most successful period to date, since being established in 2011. There is no way we could have delivered the results like we have unless there has been a desire from borrowers to utilise short-term loans.

So, why is that the case? In my opinion it all comes down to the adaptability and flexibility we can provide. Not only in the sense that a bridging loan is advantageous owing to the fact the loan can be tailored to suit the client, but also how we can develop our product range to meet the market demand.

One of the main misconceptions about the specialist lending industry is that this type of finance is only suitable for residential property purchases. However, the reality is that bridging finance can be used for a range of opportunities which require immediate funding: from a temporary cash flow problem in a business or buying a property at auction – the list goes on. This alone shows the versatility of bridging finance and why we’ve been able create and adapt various products to support so many brokers and their clients in the last few months, regardless of the challenges in the wider economic climate.

That said, we are fully aware there is a lack of confidence in the market. The challenge for brokers is to find a lender they can rely on and feel confident that they’ll deliver what they say they will. While rates are undoubtedly an important factor when weighing up the pros and cons of each lenders offering, brokers should always remember that cheaper rates come at a price and generally, the cash saved in the initial rate is clawed back somehow, whether that be charges, default interest, or more commonly, in the form of extension fees.

This is why it is important to find a lender who is fully transparent from the get-go. Experience and service excellence have never been so crucial in delivering a successful outcome for the client.

Our approach at Hope capital has always been as a “hands-on” lender. We are a tight-knit group and treat all our clients as individuals. We make it our duty to get to know our borrowers and their projects and stay involved within those projects, so we know what is going on throughout the term of the loan.

Not only does this level of involvement ensure we are providing the very best service for our clients, but it also allows us to anticipate when a borrower needs some flexibility in their loan terms. For example, if planning has taken longer than it should have, or there has been a delay to the work on the property.

Historically bridging may have been seen as lending of last resort but this is no longer the case. The short-term market has been on the increase for a while now, with more and more brokers understanding the valuable role that bridging plays, not only for homeowners but particularly for businesses and developers.

Although we find ourselves in difficult times there are still plenty of opportunities out there for brokers to support their clients with confidence.

Share this article