Specialist Lending

Bridging borrowers prioritise speed over rates

44% said 'speed to completion' is the main priority, ahead of 19% who said securing the lowest rate was most important.

Rozi Jones
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6th September 2019
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"The time between initial proposal and drawdown is now greater than it has been for a long time, and it’s the customers who are setting the slower pace, not the lender."

Brokers say ‘speed to completion’ is borrowers’ main priority when arranging short term finance.

44% of brokers responding to a United Trust Bank survey said that ‘speed to completion’ is currently the main priority for bridging borrowers.

Less than half that number (19%) said that securing the lowest rate was most important, only slightly ahead of ‘certainty of funding’. Speed of initial decision was rated most important by just 4% of respondents.

The poll also asked in which sectors they were experiencing most demand for short term finance. Property development and refurbishment and conversion took the top two places with residential investment purchases the third most common use for bridging. Refinancing of existing bridging loans was fourth.

Gavin Diamond, commercial director for bridging at United Trust Bank, commented: “It’s interesting that although a majority of brokers indicated that a quick completion is the most important factor for borrowers when placing a deal, in reality UTB are often the party waiting for the customer to trigger the drawdown of the loan. Lately we’ve noticed that the time between initial proposal and drawdown is now greater than it has been for a long time, and it’s the customers who are setting the slower pace, not the lender.

“The fact that the speed of the initial decision ranked near the bottom of the list of borrower priorities also contradicts our experience. In most instances the broker and the borrower want a quick decision and the assurance of an offer letter to enable the clients to move on with confidence. After that, the request for funding is often delayed."

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