The bear market we are in is fantastic news, a packager told Bridging & Commercial recently. We got the insight from Terry Markham, Managing Director of The Funding Operation, as to what he believes the current state of the industry is at the moment.

One of the most memorable speeches I have heard this year was by Jonathan Samuels of Dragonfly Finance. He described how the bear market that we are in is fantastic news for those that are open enough to embrace it. I must say that I whole heartedly agree with his wise words, and it appears that I am not alone in my thoughts.

This year has been a phenomenal success for TFO, and therefore, I would suggest that is echoed by many of our competitors and ultimately virtually all short term lenders. Let us pray that nothing radical happens within the banks to change their current train of thought over their lending practices.

The short term lending market has really gone from strength to strength during 2011 and I really believe this can be attributed to both brokers and lenders.

Experienced brokers, who are used to having to re-invent the wheel when income is threatened, have recognised the benefits of short term lending to assist their clients and lenders, fighting for market share, have become more innovative in their product design and marketing.

Whilst it appears short term lending has come of age, this is not entirely due to the lack of more traditional funding, but its rapid growth has also been assisted by brokers making good use of the other benefits it brings, and this can be borne out by the type of enquiries we have been receiving.

For whatever reason many properties are being purchased below what is perceived to be the real market value. Many short term lenders continue to lend against the confirmed market value and not the purchase price, which allows purchasers to greatly reduce their initial contribution towards the purchase price and costs, whilst retaining the benefit of refinancing the exit based upon the full value of the asset.

Another growing area is that of financing properties that require partial or major refurbishment. More and more lenders are seeing the sense in lending against a security which is going to see instant increase in its value, whilst only releasing further funds in stages, further safeguarding their security.

Obviously any growing market also has its problems. It is now well documented that short term lenders are seeing a growth in fraudulent applications. The major difference to these lenders is that a successful fraud can cause untold damage to them as opposed to the large corporates who can more easily deal with the fall out of these crimes.