Broker Guide to Networks

Broker Guide to Networks



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How important is it for short term lenders to be connected with a network? It’s the million dollar question that B&C wanted to delve into to find out what relationships are currently held and to quantify what the benefits are for brokers and lenders alike...

The reason for this big question is that it is not possible for a lender to track every case that has been introduced via a network, and thus it is hard to realistically find out how many deals completed are a result of these introductions.

There are clear benefits for brokers signing up to networks, especially when it comes to short term loans. Intermediaries are increasingly offering this type of financing solution to their clients and many are unsure of which lender to go to.

Networks provide regular guidance and on-going advice for brokers who have signed up to them, as well as providing access to exclusive products, if marketed by a lender, that they may not otherwise have attained as a non-network member.

And yet, there are some downsides to joining some networks because a broker may be limited to the products that only its preferred lenders provide.

However, offering a lenders perspective, Richard Deacon, Sales and Marketing Director at Masthaven Bridging Finance, told us that it is very rare for a lender to be tied to a network.

Richard said: “A network’s main priorities don’t necessarily include bridging finance, so many of them tend not to sign up a short term lender as part of their network and look towards a packager instead.

“However, we are signed up to a number of networks who recommend to their members which bridging lenders to go to. For example, Masthaven are introduced business through the Paradigm Financial Advisers (PFA) network.”

Something else to take note of is that a number of intermediaries go down the packager avenue to source finance for their clients as opposed to going straight to a lender.

Christian Faes, Managing Director of Montello Finance, said: “We deal with a number of packagers and a couple of networks, in terms of introductions, and both relationships are definitely key and worth having.”

Omni Capital doesn’t currently distribute through networks as they have a strong panel of preferred partners, who in turn have their own networks and broker contacts.

Bob Sturges, Head of Communications at Omni Capital, told us: “Our current distribution strategy via panel of experienced partners is working well for us. However, we recognise the value of networks in the distribution chain and anticipate getting closer to them in the near future.”

Cheval Bridging Finance are currently on the lender panels of a number of networks, which includes Pink Home Loans, Premier Mortgage Services (PMS) and Personal Touch Financial Services. According to Gavin Diamond, Finance Director at Cheval Bridging Finance, “They are the three key networks on which we focus our attention.”

Just a couple of weeks ago we saw Precise Mortgages become a preferred bridging lender for Ingard Financial, Mortgageforce, Pink Home Loans, Personal Touch Financial Services, PMS, Sesame and SimplyBiz Mortgages.

Alan Cleary stated on Bridging & Commercial Distributor at the time: “We’ve partnered with these distributors in a bid to clean up the bridging market which, at the moment, is a minefield for borrowers. I have taken a good look at this market and in my opinion many bridging lenders have a different view of what the word transparent means.

“There is a myriad of interest and fee charging methods, many of which are not good for the borrower, and this is compounded by the inconsistent information provided to borrowers which makes deal comparison almost impossible. Precise Mortgages has a principal to treat all types of lending secured on residential property in a manner consistent with FSA regulation.”

Bridging and short term finance is a relatively small part of the general finance industry but the rising number of brokers increasingly looking at this area highlights how important it is for this type of finance to be marketed by networks.

It is clear that networks are extremely beneficial for brokers and lenders alike so it will be interesting to see which lenders start to strengthen their existing relationships, and indeed, create new ones.

 

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