Holly Andrews

An interview with Holly Andrews: Brokers launching their own lending business is a 'good thing'

KIS Finance recently revealed that it was looking to sell or merge with another broker or lender.

In an interview with Bridging & Commercial, Holly Andrews, managing director at KIS Finance (pictured above), gives us a progress update and an overview of the wider challenges in the bridging market.

You’ve mentioned that you’re looking at a sale or merger. Have you had any offers?

The response from the article you ran regarding a possible sale or merger was surprisingly strong. We only expected to receive a few calls and feared that we may not have any at all, but we received many, which led to us meeting with around 12 parties. These were a mix of lenders and medium to large brokers/packagers.

As we explained to those that we met, the article was for us to test the water and gauge any potential interest for a sale or merger, but more importantly find out where we were lacking and what we needed to put in place or work on in order to make us more saleable at some point in the future.

One of our key strengths is that we have been very involved in bridging finance for over seven years now, which makes us experienced, or possibly even old timers in the market. Our marketing is good, or so we are told, and we deal directly with the client.

We don’t tend to deal with introducers/other brokers, so we don’t have the facilities, tracking systems or BDMs that other brokers/packagers have. There are no plans at the moment, but perhaps in the future we may put in the required systems and actively look to attract introducers.

Before looking for introducers, we would also need to address the fact that we don’t have many direct agencies ourselves, but instead have formed close relationships with a number of packagers in order to make use of their facilities, experience and resource. Although this helps to keep our own staffing numbers down, it does mean we are also sharing any income.

Deep down, we had quietly hoped that a lender or packager would see a fit for us in some form of merger, recognising the skills that we have and how we could benefit their own marketing, conversions, client retention etc.

We’ve seen a rising number of brokers setting up their own lending business. Is this healthy for the industry?

Overall, I see brokers setting up their own lending business as a good thing. As a broker, the more lenders the better! Plus, we are still waiting for that perfect lender.

It would, however, be good to see a more diverse range of funding lines with these lenders, so that we can perhaps have some more specialist products, rather than just the same thing that everyone else is offering. Many lenders are using the same funding lines, so really there isn’t that much difference between them.

Whenever a broker has their own lender, or a tie up with a lender in the form of a branded product — enhanced commission or additional payment on the drip etc — there is the risk that they are going to naturally favour that product for a client, over an alternative that would have better suited the client’s needs.

Do you think more clients are shopping around with brokers? Why do you think this is?   

Our business comes from the internet and has done so ever since we started arranging bridging loans. People who buy from the internet will naturally shop around, so this is something that we have always experienced.

People who wind up with a bridging loan via their financial adviser, accountant, estate agent, solicitor etc are less likely to have shopped around. They often tend to trust the advice received and don’t feel the need to look elsewhere.

Are lenders missing a trick in any areas of the bridging industry?

Ha-ha! They don’t miss many tricks!

What will be the biggest challenges for the bridging market this year?

Brexit for me is the biggest challenge. The UK has been set up to function within the EU over the past 30 years and to change this is madness. Investment in the UK is already being affected and we have already seen some funding lines being lost, uncertainty in the market and house price drops.

So many businesses in the UK now have major staff issues that they are having to turn away work. For example, restaurants are restricting their menus, number of covers or closing early. Many companies which have government contracts have stalled or are suffering as work has been put on hold until Brexit has been sorted out.

I could go on, but, in short, Brexit has already been a massive shock to the system and it still goes on.

If you didn’t work in finance, what would you be doing?

Probably something completely different like human archaeology, which is something that’s always been of interest to me.

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