News Review: Short Term Finance


Short-term space


by Paul Brett, business


development director, borro


the question of the rights and wrongs of self-certification and non-status mortgages and loans has raged over the past couple of years and living in the new reality as we do, i am always surprised by how


many pundits who were so silent on the subject pre-2007, suddenly announce that they were never in favour. the problem remains that there is a large constituency


of applicants looking for loans and mortgages who, having suffered during the recession, are trying to get back on their feet. For those looking for short-term lending, traditional bridging sources have tended to be more amenable to clients’ difficult circumstances, which in itself has led the more rabid commentators to suggest that bridging is the last haven for bad lending. Logically though, it is clear to see that a bridging lender’s


exposure is only for a fraction of the time of a standard mortgage and as we have discussed on these pages before, so much of the underwriting is reliant on ensuring there is a clear exit route as well as the quality of the property asset. For those potential customers of mainstream lenders who


are unable or unwilling to provide evidence for a longer term loan, the choices for funding narrow. What is clear, particularly for those with a pressing need for funding, is that a conventional funding source usually means a long- winded trail and the timeframe to make the loan is just not there. But as we have found at borro, borrowing short-term against personal assets can be a very liberating way of raising funds fast because there is no requirement to prove income. Very simply, if someone needs funds, as long as they can provide sufficient security for a loan, then it can be done.


Market size reports have indicated that there is now the distinct possibility of the short-term lending space becoming overcrowded along with the assertion that there is a finite value on how much short-term lending business there is in the market. these two views have led to a commentator making the interesting observation that the market will peak soon. Personally, i think it highly unlikely that we have even


begun to exploit the demand for short-term funding and commentators should be careful not to try to put a finite value on the amount of business that is out there. neither do i subscribe to the view that most of the growth in short-term lending will come from the sub-prime client pool. Short-term lenders aspiring to remain in business in the


long term, particularly if full regulation becomes a reality, will want to have nothing to do with creating a haven for last chance lending.


mortgage introducer OCTOBER 2011 21


A new way of doing GI business!


Paymentshield is launching a new website built around your needs. The new website will feature a fully online quote and apply system combined with sales and marketing tools to boost your GI sales.


Existing Paymentshield agents can request our free guide to the new site by visiting www.paymentshield.co.uk/itscoming


If you would like more information or would like to become a Paymentshield agent


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This document is solely for the attention of Directly Authorised or Exempt Firms as defined by the Financial Services Authority and must not be issued to the general public. Paymentshield is a registered trademark of Paymentshield Limited (registered number 02728936) which is a company registered in England andWales at Paymentshield House, Southport Business Park,Wight MossWay, Southport, PR8 4HQ. Authorised and regulated by the Financial Services Authority. Telephone calls to Paymentshield may be recorded for security purposes and monitored under our quality control procedures. © Paymentshield Limited 2011. PSL/4423/MI-IW-AD. (10/11).


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