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Market knowledge must extend beyond the boardroom – Hersch

by: Benson Hersch, chief executive, Association of Short Term Lenders
  • 05/11/2019
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Market knowledge must extend beyond the boardroom – Hersch
One of the key roles of the Association of Short Term Lenders (ASTL), as with any trade association, is to raise standards and levels of understanding.


Knowledge is power and it’s important for all businesses to take every opportunity for staff to build their personal, professional and institutional knowledge.

Most businesses do take this on board and invest in access to market insights and having an outlook onto the wider world.

The mistake many businesses also make is to confine such knowledge to people in senior management and to neglect to extend it to other staff.


Pursuing lender strategy

You can understand the logic for this.

After all, it’s those individuals whose job it is to set the business on its strategic direction and they should have access to the information that better enables them to fulfil this role. Others in the business have their own jobs to be getting on with.

However, establishing a strong knowledge of the environment in which a business operates can help most people to perform their role more successfully, particularly underwriters.

Success in bridging lending lies in placing loans and having those loans repaid.

An underwriter may not set the strategic direction of a lender, but in every lending decision they do help the lender move in that direction.

For a responsible lender, lending decisions should be made in context of the wider environment.


Healthy friction

At a bridging lender, for every application they review, underwriters must understand the circumstances and the story behind the information that is supplied on the form.

They need to understand the value of the security in the context of its location and they need to test the exit based on current or anticipated market conditions.

There should always be a healthy friction between underwriting and commercial departments within a lender, and this friction should be one based on informed debate rather than personal dynamics.

For any responsible lender, it is important to provide access to the insights that can inform these decisions and to invest in building the knowledge more widely than just the executive team.

This is particularly true during a time of so much political change and economic uncertainty.

It is for this reason the ASTL Annual Conference this month is available to all individuals and businesses who want to build their knowledge of the bridging industry.


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