LENDERS RISK AND REWARD IN A TOUGH MARKET

The market is changing and different lenders are reacting in different ways...

In recent years it has been easy for lenders to lose sight of risk when it is hard to imagine that things will ever get tighter, which is probably why in recent years we have seen 21 entrants into the UK mortgage sector. However, the current squeeze has changed an overall market perception and lending criteria have changed across all areas of commercial finance, even if the current climate is driven by global conditions rather than the fundamentals of the UK property market.

Todays climate has refocussed lenders minds on the realities of lending up to a point, and we are currently seeing a flight to quality, both in terms of the type of client lenders will take on and the kind of deals those borrowers are looking for. It has therefore become even more important that proposals are structured and presented to underwriters in the most appropriate manner to secure funding.

Whilst capital markets fret, entrepeneurs will continue to innovate and spot worthwhile opportunities, and will continue to need funding. For solid propositions, we have found that it has become a large part of our role to ensure that our clients propositions are not stifled by undiscriminating caution. We have also found that the lenders that we have presented quality propositions to during the boom times are showing loyalty and reviewing our propositions quickly which is adding value to our clients.

As credit tightens, short term finance becomes an increasingly attractive option. Credit scoring sytems are generally retrospective, reviewing payment histories and obvious current liabilities against income, but they are not designed to offer insight into the potential of capital assets, or indeed, the talent of an entrepreneur.

As an independent intermediary, able to use the whole market to arrange funding for our clients, we review each of our clients propositions and if that prospect is real and the security appropriate, we are able to match the risk profile of the proposition with the risk profile of the most appropriate lender.

Business Assistance is all about making deals happen

In the commercial market their is no such thing as a standardised financial product and each deal will be different, depending on the circumstances and on what the borrower wants to achieve and as such, different lenders are appropriate for different propositions. We have been doing this for a long time and have built up considerable experience - this experience matters because it means we have the knowledge to assess quickly whether a proposition is sound. If it isn't, we will say so quickly, and the fact thay many of our clients have been working with us on successive deals over an extended period reflects their trust in our judgement.

Correctly placing commercial funding propositions has never been more important than in the current climate and the flight to quality propositions need not imply a flight to recession or that funding is simply not available.

Business Assistance (NW) Ltd. is a commercial finance intermediary specialising in property development finance, bridging loans and commercial mortgages, and has arranged over £29m for property clients in the past 12 months from a panel of over 30 specialist lenders.

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