Let’s keep the vibrancy alive in bridging
By Colin Sanders, CEO at Tuscan Capital
When I launched Tuscan Capital earlier this year, I was determined that a central part of our broker offering would be guaranteed, uncomplicated, direct access to mandated senior decision makers.
Having seen first-hand the growth of bridging over the past seven or eight years, I was conscious that certain practices and processes within the sector had taken on a more institutionalised form. While this has brought many advantages, such as helping to raise standards, I believe it has also diluted the vital entrepreneurial edge that makes traditional bridging so compelling.
I would argue that nowhere is this trend more evident than in the way in which loans are underwritten and credit decisions communicated to introducers.
Bridging – distinct from its more complex development funding cousin – should be about speed and decisiveness. There is little that frustrates brokers more than being unable to get a straight answer, and quickly.
In this sense, smaller, entrepreneurial lenders possess a distinct advantage over their more bureaucratically inclined peers. With leaner teams and shorter internal decision lines, they are able to bypass the more arcane credit committee structures typically favoured by larger and often more risk-averse institutional funders.
As real estate bridging continues to attract the interest of investors and funding struggles to make meaningful returns from other asset classes, it is likely that elements of the sector will continue to take on the appearance and behaviour of mainstream mortgage lending.
While I do not think this is necessarily bad news – any development that enhances the reputation of bridging should be welcomed – we should nevertheless be cautious about stifling the vital dynamism and vibrancy that has helped attract so many newcomers to bridging in the first place.
There’s relatively little we can do about the external regulation of the sector (although we should continue to argue energetically and vociferously for it to be bespoke and proportionate), but each of us on the lending side can certainly take steps to ensure that our internal commercial processes, practices and attitudes are fit for purpose.
Inevitably, each lender will adopt the credit decision model best suited to its business. But I will always want to offer our brokers direct access to senior, experienced and empowered members of staff. And that includes myself.