Development finance is an art but scientific approach can help broker and customer – HTB

The left brain/right brain argument follows us through life into business. There are those people and firms that value the academic route – many see the MBA as the path towards success and high levels of remuneration; others believe, for example, that selling is a more intuitive exercise and that the best salespeople achieve their success by “feel”.

The reason the debate is apposite for me is that recently I had a thought-provoking dialogue with one of my LinkedIn connections. He had come up with a plan to create a site that would compare 140 different lenders not only based on their criteria but also on borrower feedback, ethics, response time, reliability and customer service.

The reason I believe that his idea is genius is because it will offer full transparency to the user, whether it’s a broker or a direct borrower, and help to navigate through the development finance world with ease, based on quality feedback from the community.

Those providing feedback will be helping to create a scoring system, so a quantitative comparison can be made between development finance providers, allowing users to compare like-for-like in a semi-scientific manner. Lender X scores nine out of 10 on service compared to Lender Y with seven, therefore customers’ experience with Lender X is better. It’s an easy concept to understand and one that works across thousands of comparison sites.

‘Development finance is an art’

That said, the one thing I advised him against was trying to guess what terms each lender will offer. That’s because I sincerely believe that development finance is an art. It can’t be programmed from artificial intelligence (AI) or machine learning; instead, we need real underwriters to work with real transactions, real brokers and real borrowers.

With this in mind, the development finance team at Hampshire Trust Bank (HTB) has been designed and structured as a people-led business: we are people working with people. The computer doesn’t say “no”. We have a conversation, we listen. Any complex transaction can be made simple if we talk about it.

Now, this approach works because of the knowledge and experience which flows throughout the team. For example, when a broker contacts their local HTB representative with a development finance enquiry, the person on the ground can often be on-site the very same morning.

Lending directors work closely with relationship managers and credit, ensuring a seamless service. Lending directors stay informed of the case’s progress and have the experience to resolve issues by liaising with relevant specialists. We engage local professionals to advise us on funded transactions due to their deeper understanding of local issues.

Computers, designed by scientists and mathematicians, continue to change and largely improve our world for the better every day. For example, ChatGPT is dominating the headlines because of its uncanny appearance of intelligence.

It is creating headaches for teachers trying to establish whether a student wrote a particular essay or not, and it may well lead to certain job functions becoming redundant over time. But it won’t be able to work out how a development finance lender will response to a certain case put to them.

Put simply, it’s an art not a science. We are real people who are here to listen, so let’s talk development finance.