Comparing companies that look like they do the same thing has often been a challenge. I guess that’s why the likes of TripAdvisor.com has become so successful, in order for people to see the experiences that other people have had before making a decision to use a certain hotel or operator.
For brokers it is a bit harder, especially in arenas such as bridging and other areas of specialist lending which you may not be dealing with every day. In this case, there is no TripAdvisor to tell you if another broker has had a good or bad experience with a certain lender, or how it worked out for their clients. This you typically find out either through experience or word of mouth.
Other than reputation, all you have to go on is rate – but a low rate can hide a number of service issues, indeed it can lead to them. This is far more associated with lenders in the mainstream market, where a low rate leads to a flood of applications and can lead to service failures. But with bridging it is especially important not to be blinded by rate. Especially when what the client actually needs most is the guarantee of funds, within a certain time, and access to decision makers in order to get the service they need.
Typically a borrower will use a bridging loan because they need the money quickly; sometimes their property purchase will rely on this. So the broker has to know that when they recommend a lender and the lender says they will lend the funds, that is absolutely what they will do. They also need to know they will do it in the timescales agreed.
The Association of Short Term Lenders (ASTL), the bridging lenders’ trade body, has put in place a strict Code of Conduct and a Values Charter to try to help take some of the guess work out of using a lender for the first time. The aim is to reassure brokers that ASTL members will abide by the highest standards at all times. In fact, within the past month all the ASTL members voted to raise those standards still further and ban the back charging of higher rates of interest.
Reputation really is key when using a lender for the first time. It is not TripAdvisor, but using a lender who is a member of the ASTL should help bring another element of reassurance to brokers when looking to use a bridging lender.