It’s all very well receiving significant volumes of enquiries from semi-interested brokers at the outset, but the key for a successful bridging lender comes down to converting these tentative enquiries into tangible applications. In an attempt to get to the crux of the matter, Miranda Atty spoke to various industry professionals to shed some light on the common stumbling blocks between lenders and brokers, what can be done to overcome these issues and the relationships between BDMs, brokers and underwriters...

Richard Deacon, Sales and Marketing Director of Masthaven Bridging Finance, explained that, as far as he is concerned, “Education of introducers is key.

“If the introducer doesn’t understand how bridging works, you have a much bigger chance of the enquiry not going anywhere – as they may have not explained the features and benefits to the clients in the best way possible.”

Neil Molyneux, Cheval's BDM, highlighted that if brokers are unaware of the specifics required for successful completion, “the story they tell may be a watered-down scenario which omits details, which will ultimately cause that case to fail.

“My introducers know that I need to have all of the information – warts and all – and then from this information I will help them formulate a strategy to get the case to completion.”

For Gary Bailey, Director at the Blemain Group, some of the hurdles affecting deals getting done include: “Application information being incorrect or incomplete, affordability, suitable valuation and not getting the full information on the application on day one.”

However, there are things which lenders can do to make the process easier. Gary explained that offering training and support or “help guides such as Blemain’s ‘Ideal Pack’ guide” can facilitate and encourage brokers to submit applications.

Dragonfly Property Finance’s CEO, Jonathan Samuels, however, emphasised that a basic understanding of this specialism is increasing throughout the financial services industry: “I would say that brokers are increasingly savvy when it comes to bridging. There’s a lot more knowledge about how bridging works these days than there was a couple of years ago.

“Probably the biggest challenge for brokers is understanding the preferences of different lenders and the types of deal they are particularly keen on – or averse to. That’s no fault of the broker, just a knowledge they sometimes don’t have because they are not specialists in the sector.

“To get around this, we work with key partners, packagers and master brokers who point brokers in the right direction and ensure deals go through to the right lender, not the wrong one.”

Neil added, “Bridging is different to just about every other form of consumer lending. I can speak to brokers, a deal can seem absolutely fine from an underwriting perspective, but when you look at the overall case it just doesn’t make sense.

“Brokers would benefit from taking a step back and looking at the case that has been presented to them and asking one simple question - ‘Does this make sense to do?’ As a lender it is certainly a question we ask.” He explained that, when the answer is ‘no’, a bit of digging often uncovers a completely different scenario to the one originally presented.

Neil continued, “It is about a broker understanding the case and then presenting it in the best light. If an application is presented that generates a question in the underwriter’s mind, the documentation should provide the answer.”

When it comes to converting enquiries into applications, the BDM’s role is vital. Gary explained: “The BDM can be the liaison point for the broker and be the voice of the broker internally at the lender. Essentially, the broker and lender are part of one continuous process.

“The BDM is the bridge/conduit between the broker and the lender, providing support for the broker in their day-to-day activities and helping both the broker and the lender gain a greater perspective on each other’s business and views or requirements on individual cases.”

So, how can a successful BDM help generate applications?

Gary advised that a BDM should be: “Available when needed, offer support and training as required, help the broker with things they might not be aware of in relation to criteria or an individual case, and help to identify opportunities that the broker may not have recognised.”

Consequently, the relationship between a BDM and an underwriter is extremely significant. Richard told us that, “Relationships between BDMs and underwriters are paramount. The synergy between the two must be such that everyone is working towards the common goal of getting the case completed as quickly as possible. Communication is king!”

Neil agreed, likening the role of a BDM to a role in the United Nations: “You cannot function as a BDM unless you have the ability to underwrite and have a rock solid relationship with your colleagues. Being able to negotiate is key, as is understanding concerns.

“A good underwriter won’t say ‘no’ for no reason. They understand the issue and then resolve it. This can be a delicate process, but it’s actually part of the job I really enjoy.”

However, Jonathan emphasised that, “the number of enquiries a lender gets comes down to a number of factors. These include strength of brand, reputation in the industry, quality of service levels, types of product and rate, not to mention marketing activity.” He stressed that it is about the brand, rather than just the BDM when it comes to bridging.

“A good BDM will understand and appreciate risk, albeit perhaps not to the same level as an underwriter does. At the same time, a good underwriter will understand the commercial requirements of a business, and that’s the balancing act.”

When it comes to converting enquiries into applications, BDMS, underwriters, and lenders as a collective generally want to facilitate as smooth a process as possible. With communication and education the order of the day, effective deals can and will get completed.