Lender identifies shift towards bridging
The economic turbulence of recent years may be retreating, but more brokers are exploring specialist finance, while the cost-of-living rises, it’s suggested.
Jade Keval (pictured), sales director at bridging lender Somo, which is based in Altrincham, Greater Manchester, identifies growing interest in the finance option, as it achieves greater recognition.
“An increasing number of brokers are reaching out to Somo for in-person or virtual discussions to gain insights into bridging finance,” she shared with Mortgage Introducer.
“Historically, this path hasn’t been as favoured among brokers for their clients, but we’re witnessing a shift as bridging finance gains recognition for its versatility and advantages.”
She commented: “I don’t want to jinx it, but I feel the turbulence is behind us for now. With that being said, the rising cost-of-living means there will still be a high demand for our valuation only product and specialist lending. I expect we’ll see ourselves helping clients exit bridges in default, raising cash as a second charge or purchasing unmortgageable properties won at auction.
“Specialist lending thrives when the tickbox lenders pull back. It’s where more and more of your previously seen high street customers turn to us, often realising the ease and common sense used in securing them a loan. For us, hopefully, it means clients come back again when looking at their options for borrowing.”
How do lenders approach cases?
Somo, which was founded in 2014, specialises in bridging finance secured over UK property.
“The way we approach cases definitely differentiates us,” Keval explained. “We look at each loan independently and from every angle. Most lenders won’t wait to review all three parts of a case – legals, UW (underwriting) and valuation. If they see something they don’t like the look of, such as bad credit, they’ll say ‘no’ at that point. Our team looks at the case file holistically - all the credits and demerits as a whole - and will always try to find ways to say ‘yes’. We call this our 360 promise.”
The lender is known for its eye catching promotions, but its priority is always its customers, according to Keval.
“Our promotions are great for creating a bit of a buzz for Somo, internally and externally, and of course we tend to be busier during these months but our intention is always to help the borrower first,” she noted, referring to its latest offer as an example.
“Our interest free promotion can save borrowers a good amount on their loan and, in turn, increases business for our brokers who have supported us over the years; it’s a win-win for everyone involved.”
Keval points to the work the lender does in educating the market, enabling brokers to understand and learn more about it as an alternative form of funding.
“We provide our own, comprehensive guide to bridging, and our relationship directors are passionate about the educational aspect of their role,” she elaborated. “By taking the initiative to learn more about bridging, brokers can unlock new opportunities in their business ventures.”
Read more: Somo hires new relationship director
What is the biggest challenge for a specialist finance lender?
The specialist sector is not without its challenges though.
“The biggest challenge as a lender is finding a niche and knowing where your identity is in a market in which speed can no longer be used as a USP,” Keval reasoned. “We spent some time reflecting on where we sit and our market-leading second charge and valuation only products definitely set us apart from the rest.”
Having worked in finance for 14 years and been involved with bridging for over a decade – including seven years at Somo - Keval is clearly highly engaged with her sector.
“I love the specialist market,” she enthused. “I love how fast-paced this sector is; it keeps us on our toes. I also love that we have the flexibility to say ‘yes’ to those ‘out of the box’ cases. Unlike most high street lenders, we always find ways to lend to a borrower who otherwise has been turned away by tick box applications and traditional credit assessments.
“I love that we can help people achieve business goals or build their property portfolios by giving them the helping hand they need, but didn’t think they would get.”
