November 2019
By Scott Marshall, Managing Director of Roma Finance
Scott Marshall, Managing Director of Roma Finance, discusses the ways in which slick systems, the latest technology and putting the customer at the centre of decision making can help property investors choose the right lender when looking for bridging finance.
Bridging finance remains a popular way to fund the acquisition of development sites or a property for renovation.
The bridging market continues to deliver impressive results and the sector is still seeing a high level of business. All the more reason to ensure lenders have a good grip on their processes, procedures and systems to satisfy the volume of business while still retaining customer service levels and satisfaction.
Integrity in Bridging Finance
Roma Finance are members of a number of trade bodies, including FIBA. They provide guidance on universally accepted standards, professional ways of working and best practice. A key role is to encourage a transparent and professional approach through a code of conduct that instils credibility and confidence for introducers, customers and business partners.
Processes, speed, technology
As bridging finance needs to be delivered quickly it’s vital that a lender has slick internal systems and the latest technology to ensure this can happen. To consistently deliver fast finance, we put in place a lean six sigma project a few years ago to review every aspect of our bridging process, from initial enquiry through to completion. All aspects of the way bridging applications are handled were put under the microscope and we can now fund many cases in just 7 days.
We also introduced Open Banking to access a read-only version of applicants’ bank statements. We were the first bridging lender to do this and it has proven to be the fastest, easiest and most secure way for us to assess affordability and at the same time removes the hassle and delays often associated with the collection of paper statements, helping to ensure prompt, responsible lending decisions are made.
Understanding the Customer
When we are presented a case we consider a number of key factors to see if we can lend.
The Borrower: they are the key to ensuring a loan performs and so we always endeavour to get the best possible understanding of them and their plans for their property project. We always meet our customers to discuss the transaction and to check they are capable of managing and completing the project.
What’s their story: Does the project have viable business projections and is it right for the local market? Does it add up?
Asset: Is there adequate security for the loan?
Exit: How will the customer be paying back the bridging loan at the end of the term? Are they selling or refinancing the property/properties at the end of the project?
Choosing the Right Lender
How a lender is funded can be very important when financing a large or complex project as they can often take longer than expected to complete. In the bridging and development finance arenas introducers want the confidence that the lender will still be there when their customer’s project is coming to an end, or they have more funding available if you need a little extra as the scheme progresses or to finish it off.
The key is to find a lender that has a range of different funding sources which minimises the risks of there being a funding shortfall. Roma Finance currently has a number of different funding lines from a variety of institutional backers, and this strategy has been deliberately followed to ensure long term business continuity.
The Benefits of Bridging
In a growing and dynamic market with many lenders to choose from it’s important to consider lenders that act with integrity and have expertise in being able to understand the needs of the customer. A lender with a professional approach and transparency in everything they do is crucial in a fast-paced and dynamic market. This approach has certainly helped Roma be at the forefront of the industry and grow our business as a result.