Aren’t Alternative Finance Brokers Just The Middle Man?
Occasionally, paying a broker can feel like one expense too many in an already costly enterprise. But brokers are uniquely positioned, they do not have their own product to sell, so in order to win business they must find the best deal for every client. They need to know the whole marketplace and understand it from multiple points of view. A good broker needs to know how lenders underwrite their loans, how the legal processes work, how surveyors value property and need a good understanding of refurbishment, building, converting, the rental market and more.
What can a broker do for you?
Brokers have worked incredibly hard to build relationships with lenders throughout the duration of their career. As a result, they have a wide network and access to hundreds of lenders, which ensures that they secure you the best terms. With so much competition in the market, they will use their knowledge and longstanding relationships to find the most suitable deal for you.
With relationships built on trust and professionalism, lenders will know that your broker only represents companies that have a chance and won’t entertain those that won’t qualify for alternative finance. Your broker will have ran through your project comprehensively to prepare an outline application for you, which ensures that there is a strong case to put forward to the lenders.
Lenders are tough and critical, they need to ask difficult questions to mitigate risk. They have numerous proposals coming to them every hour, and a good broker will ensure that by the time a deal crosses their lenders desk, the difficult questions have been asked and most of the barriers to lending have been removed. Brokers are born negotiators, they speak the same language as lenders and know exactly what the lenders need to hear to feel convinced by an application. Similarly, as they pitch companies on a daily basis, they know what the lenders don’t want to hear, so they will strip it back to the necessary facts and figures making the most of the attributes of any one application.
There have never been so many alternative lenders in the UK (well over 200) and to try and navigate that marketplace as a consumer is a near impossible task. Brokers speak to multiple lenders every single day and keep on top of the latest products. They often get preferential rates and offers too. Each lender structures their loans differently so to get a like for like comparison is very difficult unless you know every potential charge. A good broker with transparently explain the positives and negatives of each offer ensuring you don’t get caught out by a low rate which actually compounds twice or hefty draw-down and QS fee’s on a development. Alternative finance really can be a minefield and the right broker with navigate you straight through it and get you the result you need without the pain,
So a good broker is far more than just a middleman chasing after a slice of the pie, a good broker will save you a lot time, many headaches and lots and lots of money.
DO YOU AGREE? – We’d love to hear your thoughts, please comment below.