CFI: News Review


Packaging specialist loans is generalist’s panacea


by Yousouf Roze, director, First 4 Bridging


Brokers can’t be expected


to know the ins and outs of every single deal that lands on their desks. if it looks like a client needs a bridg- ing loan, which can often be quite complex and time- consuming to process, then brokers can turn to a spe- cialist packager to do the hard yards for them. But what do bridging


packagers do, how do they charge and most important- ly, what value do they add for the broker? Packagers do exactly what


it says on the tin. they pack- age up applications from brokers’ clients for special- ist lenders in order to give that client the best possible chance of having his or her application granted.


The benefit one question often put to us is why would a broker want to get someone else involved in a deal? Surely they should just do it all themselves and go direct to the specialist lender? in some cases brokers


will be armed to do just that as they will have an un- derstanding of the quirks, processes and particular re- quirements of the specialist lender. But if they don’t have the


experience or knowledge necessary to a niche sector, they need to do their home- work first. in our experience,


“There’s no doubt that on a 50/50 deal, being backed by a packager can be the difference between a green and red light”


failing to provide the right information or sometimes giving too much informa- tion can result in an applica- tion being rejected time and again. one reason a broker may


want to use a packager is to save themselves the time and effort required if they go direct, especially for more complex applications. don’t underestimate the amount of work that a complex bridging loan application can involve. another reason to use a


packager is the close rela- tionship they have with lend- ers. often packagers have access to exclusive products or can achieve those little extras such as persuading a lender to stretch a loan to value or getting it to accept a valuation from a valuer that is not on its panel. and there’s no doubt that on a 50/50 deal being backed by a packager can be the dif- ference between a green and red light. also, and this is a point


that can’t be overstated, a packager is essentially an initial underwriter on a deal, as he or she will usually


52 mortgage introducer MAY 2011


know almost immediately whether a loan will be of- fered. this can offer peace of mind to brokers and their clients.


The cost as you would imagine dif- ferent packagers charge in different ways. Packager a, for instance, may charge a percentage of the broker’s fee, while packager B will charge a percentage of the procuration fee. other packagers take none


of the broker’s fee while he or she also receives the full procuration fee. instead, the fee comes direct from the lender so the broker essen-


CASE STUDY: BROKER NEEDS BRIDGING LOAN – FAST


A short while back, one of First 4 Bridging’s introducers, Adrian Dadds of St Georges Finance, a commercial finance broker, came to us with an urgent re- quest from one of his clients. The client was in the process of purchasing a property in prime Central London, which he intended to refurbish and then rent out. He had placed a deposit on the property so was already financially committed. As happens all too often in the current climate, the lender that had originally agreed to finance the purchase changed its crite- ria at the eleventh hour and the deal was suddenly off. The purchase price of the property was £3.2m and even though the client had commit- ted a hefty deposit he could not access the remainder of the monies quickly enough from


tially gets the same fee using the packager as they would if they went direct. as well as often get-


ting better terms for a loan through their good rela- tionships with the special- ist lenders, brokers can also be the difference between a loan being offered or not. the fact that they are es- sentially able to underwrite a deal almost immediately gives real peace of mind to the client, which will reflect well on the broker, too. Fi- nally, if they make the same money for passing on the work as doing it all them- selves, most brokers will see it as a no-brainer.


his other investments, held off- shore, to avoid losing the prop- erty — and his deposit. Aware that the clock was tick- ing we managed to secure an alternative loan facility for Adrian’s client through Draw- bridge Finance (now Dragonfly Property Finance). We arranged for the valuation to be carried out that same day and we re- ceived the report the following morning. Meanwhile, with the help of Adrian, we collected all the other necessary information that we needed and were able to have everything packaged for Dragonfly’s solicitors within 24 hours. With both Dragonfly and the client’s solicitors sensitive to the urgency of the case, they worked closely together to complete all the necessary le- gal work well in time for the client to purchase the prop- erty within the terms of the contract.


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