The bridging finance sector has seen a sustained increase in the number of loan applications not making it through to completion in recent times. With lenders constantly changing rates, criteria and policy – not to mention suffering from a variety of service-related issues – a further layer of complexity has been added to the short-term marketplace. Meaning that brokers need extra support when it comes to sourcing specialist products and supporting applications through to completion.
So, where can you get this extra support?
Working with a packaging partner can form an important extension of any intermediary business for those who are not experts in the more specialist areas of the mortgage market. In short, packagers understand exactly what a variety of specialist lenders are looking for and how best to present often multifaceted borrowing scenarios to them. They act as a sourcing system in their own right but also have a full understanding of individual lending criteria to ensure that even the most complex cases can find the right solutions. Packaging cases in the right way also means improved acceptance percentages by lenders, more DIPs being approved and higher conversion rates to offer.
Panels, partnerships and strategic alliances are integral in building any successful business, whether operating as a lender, packager or intermediary firm and this will remain the case for the foreseeable future. The aim of all packagers is to align themselves with lenders who provide a set of well-priced, well-serviced, responsible financial solutions which can address challenges across the lending spectrum and support the needs of intermediary partners/introducers.
Building a comprehensive lending panel is an ongoing task as new entrants will always emerge. However, before they are added to any panel, packagers have to ensure that these lenders demonstrate the highest service standards, add competition, incorporate flexible criteria and are backed by robust funding lines. With lending propositions constantly evolving, this highlights the importance of an effective engagement/communications process and strong relationships across all areas of the business. And these relationships need to be constantly revisited to ensure they remain beneficial to all parties in this chain.
Many lenders are also looking to only deal directly with distribution partners to ensure cases are packaged in the right way, and correctly fit their criteria. This is especially apparent with many lenders having to carefully control business volumes in the face of some funding and service issues. From the other direction, we – as an industry – need to continue finding ways to better educate and support intermediary partners/introducers in identifying the circumstances, property types and clientele which might benefit from a range of specialist lending scenarios. Not to mention ensuring that they choose the correct specialist route for their clients and their business.
In summary, a good packager should offer a forensic understanding of the specialist markets and provide access to favourable rates, products, dedicated case managers and in-house underwriters. They should also work closely with the introducer to ensure that they are not overstepping any boundaries when it comes to the issue of client ownership. For example, we never contact clients directly during or after the case in question, unless specifically instructed to by the introducer.
Cases involving specialist forms of finance can be massively time-consuming and many don’t even result in a case being accepted. A good packager will do all the heavy lifting in terms of sourcing, collating the relevant documentation, compliance and lender liaison. This frees up more time for advisers to focus on their core business whilst still being able to service the more specialist needs of certain clients.
With the number of complex property purchases ramping up as the stamp duty deadline looms, wider access to alternative forms of funding will be required to ensure that a variety of transactions remain on track, chains are not broken, favourable terms are not missed and costly deadlines can be met. Meaning that establishing a strong relationship with a trusted packaging partner will prove even more important than ever in the coming weeks.
Donna Wells, Director at F4B