How Do You Find The Best Bridging Finance Companies Around?
Once you decide on bridging finance as your route for short-term lending usually
property orientated the question remains: how do I find the best bridging finance providers in the UK?
Most people will start with researching and sourcing bridging finance on search engines such as Google (around 90% of people use this search engine). As good as Google is the results often can be biased and misleading for your search term. I am not going to go into the mechanics of how Google works but basically the more money you have the better positions you can get. Whether this be through spending a lot on on-line advertising (Google ads at top and side of pages) or by spending money on a crack team of Search Engine Optimisation consultants who aim to get the top search engine positions for their clients. So always beware when you search on Google the results may not always be what you want.
I digress, back to the subject at hand.
A simple search will bring a number of pages all related to that topic, finding the best bridging finance. Most of the top ones will be the top UK bridging finance lenders, but does being top actually mean best? Best is a very general adjective and subject to opinion and experiences in most cases.
Ok so let's look at the top ones (this is not a promotional article and therefore we will not be mentioning any companies).
Category A These are the top firms in the industry, usually led by principle lenders (companies who lend their own private money). These guys are basically secondary banks and will act in the same vein as the banks, carrying out credit checks, loan to value of 60%, FSA regulated etc These firms can cherry pick their deals and often do, only lending to the most secure and clean individuals in the market. These firms have a pool of funds usually provided from wealthy individuals, hedge funds or institutions and can lend very quickly. This category isn't for the everyman and most bridging requirements are from Joe public usually requiring a less intrusive deal than can be offered by this category. Also massive barrier to entry as you have to go through a broker you cannot go direct.
Category B These are comprised of companies that assemble and package a bridging deal from the public to the principle lenders. This area of business involves close relationships with some of the top UK principle lenders and often these firms re-structure and package the deal with the client to ensure success of funding. Packagers don't lend any money, they simply assemble the deal and present to the funders. The very best ones have a network of bridging lenders they can approach with any deal and work on the deal until it gets done (if it can be). Packagers work throughout all areas of property finance from residential to commercial, but mostly stick to high finance loan to value deals for non-status residential property finance. This category is ideal if you have a project and need a little extra assistance to get it to the stage that makes it attractive to the funders. Again the best ones do not charge any upfront fees and only work on deals they know have a good chance of getting done. The downside to using packagers is that some use committee's to make decisions which can end up causing a long delay in getting the decision thumbs up or down.
Category C This comprises of all the brokers, IFAs and other companies in this sector. These guys are usually involved in all areas of finance (secured loans, non-property based finance, mortgage brokers,etc). This can be a very tricky category as many of these people do not have the industry experience and will just send the deal throughout the broker network on a hope to get the deal done. Many of these firms will do bridging as a side business and they will charge upfront fees (usually at the decision in principle stage). These guys are basically fee hunters and will charge you even for deals they know have no chance of getting done as they get paid whatever happens. It is highly advised to stay away from this category as this way can leave you with a lot out of pocket (not just upfront fees, legal, valuation,etc).
This list is not exhaustive but it does give a little insight into sourcing the best bridging finance lenders in the UK.
by: Geoffrey William-Davies
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