RELIABILITY IS KEY FOR BROKERS LET DOWN BY LENDERS - THE INTERMEDIARY MAGAZINE
24.07.23
RELIABILITY IS KEY FOR BROKERS LET DOWN BY LENDERS
By Colin Sanders, Chief Executive Officer, Tuscan Capital Limited.
There are all sorts of different factors that go into the advice process for brokers, far beyond simply picking out the cheapest deal. They also need to take into account elements like how the lenders operate, how well placed they are to get the funds together quickly, and which firms are going to look most favourably on the circumstances of the individual client.
For example, there’s no point pushing a client towards a lender with a cheap rate, but whose criteria is impossible to fit within.
One factor that is often overlooked, but which has become ever more important in recent months, is reliability. Brokers have always valued lenders they can trust, who can live up to their word, but that attribute has become even more highly sought after of late.
Left in limbo
Across all areas of the finance market, brokers have been enormously frustrated over the last few months by lenders who have essentially led them up the garden path. In the regular mortgage market, it might be lenders who have pulled products with little to no warning, leaving the broker desperately scrambling around for a replacement.
The specialist sector has not been immune to this, either. We have spoken to a number of advisers who thought a deal was in place for a client on a bridging loan, only to discover down the line the funding wasn’t actually there for the case, leaving the broker and borrower in limbo.
In the best-case scenario, this is simply inconvenient for the client, but all too often the results are more significant. Certainly, when it comes to specialist lending, time is often of the essence, so having to go through the process of identifying a different lender and product may mean they miss a refinancing deadline and so are out of pocket, or even lose out on a new purchase altogether.
Then there are the professional fees, which may have already been devoted towards placing that case with the initial lender, which have effectively been wasted. Nobody likes throwing money away, particularly property investors.
There can be longer-lasting damage, beyond the financial, when these disappointments occur. Brokers are trusted by investors precisely because of their understanding of the market, making them perfectly placed to pinpoint the right lender for a specific situation. When a lender drops out, and the client is left in the lurch, it inevitably dents that trust and potentially the entire relationship.
It may be that when the time comes for help with arranging finance in the future they opt for a different broker.
Lenders you can trust
It doesn't have to be like this, however. Some lenders have gone out of their way to build a wide range of funding sources, ensuring when they say they can help with a case, they can deliver. It’s something that we have spent a lot of time and effort on at Tuscan, and we know that it has meant Tuscan becoming the go-to lender for a growing number of brokers.
Obviously, it’s not enough simply to have the funding in place - lenders also need to be able to offer deals at competitive rates and provide a quality experience for borrowers. Again, that’s an area we have invested in, with our Fast Track process utilising automated valuation models (AVMs) and desktop valuations to ensure cases proceed much more quickly so even the tightest deadlines can be hit.
However, lenders who can combine quality products and processes with funding reliability will always stand out from the crowd. Brokers know their client will get a good deal, a smooth customer journey, and with no question of the deal falling through because of funding certainty.
Not only does this mean the client gets the individual case over the line in time, but it also further strengthens the relationship with the broker. If they know the adviser can pull it out of the bag for them, even when a case is a little challenging, then they are more likely to return to that broker year after year for all of their financial needs.
Ultimately, that’s the standard that all lenders should be striving for.
Read the July edition of The Intermediary Magazine here.
For more information or to get in touch with the team, please contact us:
Call Us: 020 7846 9030
Email info@tuscancapital.co.uk
View our Regional Offices:
London Office
Birmingham Office
Manchester Office
A range of case studies demonstrating examples of previously completed loans can be found here.