Why lenders shouldn’t be put in boxes
Roz Cawood says brokers should look beyond perceptions of commercial bridging and focus on finding the right funding solution for each client.
As an industry, we have a habit of putting people, businesses and lenders into their own little categories. Once we decide what something is, we often stop looking further.
That’s particularly true when it comes to commercial bridging.
At StreamBank, we still find that many brokers think of us primarily as a regulated bridging lender. That’s understandable because regulated lending forms a significant part of what we do, but it can sometimes mean brokers don’t automatically think of us when a commercial opportunity lands on their desk.
The reality is we’re probably not alone in that. Across the specialist lending space, there are plenty of lenders supporting a much broader range of transactions than they’re often given credit for. The trouble is that once a perception takes hold, it can be really difficult to shake.
That’s why I think brokers need to think differently about commercial bridging.
Looking beyond the obvious
The market has become increasingly price-driven over the last few years, particularly in the regulated space, which is totally understandable. Clients want the best deal available, and brokers quite rightly want to deliver that, although it’s vital that the focus extends beyond price.
When that price fixation happens, there’s a risk that genuinely good opportunities get overlooked because they don’t fit into the vanilla end of the market.
This is where specialist lenders can really add value, as the cheapest option isn’t always readily available and, even when it is, it isn’t necessarily the most appropriate solution. Sometimes flexibility, speed and a common-sense approach to underwriting are just as important.
The other thing that’s worth remembering is that borrowers rarely view their situation through the lens of a product. They’re focused on an opportunity, a challenge or a deadline. They’re thinking about buying an asset, expanding a business or unlocking value from a property. It’s brokers and lenders that tend to categorise those requirements into funding solutions.
Which is why it’s important not to let assumptions narrow the options before the conversation has even started.
Commercial bridging isn’t just for quirky deals
One of the biggest misconceptions about commercial bridging is that it’s only relevant for unusual transactions. In fact, that’s probably one of the biggest myths we come across.
Many commercial bridging cases are simply business owners or investors spotting an opportunity and needing funding that allows them to move pretty quickly.
They’re not necessarily doing anything particularly complex. They just need a lender that understands what they’re trying to achieve and can provide a solution that helps them reach that point.
A recent transaction we supported is a really good example of this. The borrower was looking to acquire a large industrial unit and two-storey office building in Rochdale. They had a clear plan to convert the asset into six units under Permitted Development rights before refinancing onto a commercial term facility.
When you look at it, it’s not an especially unusual deal. It’s simply a borrower identifying an opportunity to create value from an existing commercial asset and putting a sensible plan in place to achieve it.
In fact, it’s exactly the sort of transaction that some brokers might not instinctively associate with a lender that is primarily known for regulated bridging. That’s the point. The deal wasn’t unusual, the perception was.
What mattered was finding funding that could support the acquisition and provide the flexibility needed while the project progressed. And that’s often where commercial bridging comes into its own.
It’s not about funding something quirky for the sake of it. It’s about helping borrowers unlock opportunities that might otherwise be missed.
Start with the objective, not the product
When brokers approach a case, it’s natural to start thinking about products. We all do it, but I’ve always found it more useful to take a step back first and look at the bigger picture.
What is the client actually trying to achieve? What’s stopping them from getting there? And where do they want to be in 12 months’ time?
Because once you understand those answers, the funding conversation often becomes much easier.
Commercial bridging isn’t the answer to every scenario, and it shouldn’t be. However, it’s often relevant in situations where borrowers need flexibility, speed and a lender willing to look that little bit further.
As a market, I think we sometimes underestimate how many opportunities fall into that category.
The best brokers are often the ones who keep an open mind and don’t put lenders into boxes. They don’t make assumptions based on a product range, a reputation or a perception they’ve held for years. Instead, they focus on what the client is trying to achieve and remain open to where the solution might come from.
More often than not, that’s where the opportunities are. And in my experience, that’s where some of the best outcomes for clients are found too.
Roz Cawood is managing director, property finance at StreamBank
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