Pritchard's Piece: Market uncertainty is masking the best deals

Pritchard's Piece: Market uncertainty is masking the best deals


Apparently looters in London have broken into the Arsenal trophy cabinet……..Police are looking for two glass doors!! Boom boom.

That’s about as light hearted as it gets this week. What with the States and the Eurozone heading for the next financial crisis and the comments from the press saying that it could be black Monday to Friday, I don’t feel particularly jolly.

The problem we have is that so much financial nervousness in the markets makes funders in general very worried about their own exposure and this in turn stops them lending in any form in the short, especially for bridging lenders, it means that cases that would generally be seen as more mainstream and not ideally suited by a bridging deal have no alternative.

The problem comes when you are looking at the exit routes because the funding required for that is also missing. The easy answer is to write products that can be easily used for longer term facilities and charge accordingly for the risk – a bit like the Blemain model and some of the Dragon fly products.

However, it does depend on what the investor into a particular fund is looking for and it strikes me that most of the companies offering bridging facilities have to turn the money a number of times to achieve their promised returns, which means term funding is not possible.

I realise that all the companies advertising on this site and others have some really great products but it is hard for brokers (including me with an IQ struggling to stay in double figures) to remember everything. In addition to this, I get the feeling from talking to colleagues and friends that the market is now congested with similar offerings that mask some of the more innovative ones.

My suggestion therefore is that B & C may want to look to providing a detailed product matrix that can be downloaded to a broker’s laptop, which highlights lenders/funders offering solutions in more difficult areas. Given the nuances of some of the products it will be difficult to include every aspect but giving a flavour of the design and focus would help the broker no end.

I am sure this suggestion has been tried elsewhere, but it obviously is not working at present given the comments I get about sourcing and the mistakes some make in identifying the most suitable solution to a clients needs, so there must be a market for this. I would be interested in some feedback and some examples so that I can pass the information to the right people for consideration

I hope you all have a good week and look forward to hearing from some of you



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