By Matthew Tooth, the Chief Commercial Officer of LendInvest
One of the big focuses at LendInvest this year has been on increasing the financing at our disposal. We have always prided ourselves on building a wide range of funding sources, from our online investment platform and institutional funders, to the launch of our retail bond and the LendInvest Capital lines that we maintain.
That approach has been further boosted recently, with last month seeing confirmation of £30.5m being brought in in Series C fundraising. This followed hot on the heels of £150m, which was raised in development finance funding as part of a joint venture with Nomura and Magnetar.
Building this funding base brings with it a range of benefits for landlords and intermediaries alike.
Perhaps the most obvious example of this is in the product pricing, as we are able to take on a more flexible approach to charging. That has already borne fruit, with rates for residential bridging, auction and development exit now starting at 0.55%, while commercial bridging rates start at 0.79%.
How the Funding Drive is Helping Brokers, by LendInvest
We know that brokers pride themselves on being able to secure funding at the best possible price for their borrowers, and so, if you are keen to lend, then you have to deliver the most attractive rates possible.
Delivering product innovation
It’s not enough to simply cut rates, though. With so much talk of market uncertainty and wariness among borrowers, that additional funding allows us to take a more innovative approach to product design, too.
That’s why we have dropped the distinction between tier one and tier two loans, making it far easier for intermediaries to find the right product for their client. Instead, we now outline banded rates, covering the lowest and highest rates we would expect to quote for a particular type of product.
This desire to do things differently has also led to the launch of a new Bridge to Term service, which allows borrowers who start out with a bridging case to swiftly transition onto one of our buy-to-let deals when the time is right.
We have always dealt exclusively with property professionals, so we know the typical route that our borrowers take when it comes to financing their projects, whether they have picked a property up at auction or taken on a short refurbishment job.
They need the short-term finance in the form of a bridging package in order to pick up the property and get the ball rolling, but then want to refinance to a longer-term buy-to-let deal once that initial job is out of the way.
That was a big factor in wanting to launch into buy-to-let in the first place, to be able to continue to help these borrowers to fund their projects, and, by introducing the Bridge to Term service, we believe the transition from bridging to buy-to-let finance will be as seamless as possible, saving the borrower time and money that would normally be spent sorting out a refinancing deal.
Expanding to meet broker demand
Having greater financial backing also gives us more room to adjust how we operate as a business, in order to better meet demand from brokers.
A good example of this is the way that we have revamped the business development manager (BDM) team, so that we now have a group of internal BDMs, who are always on hand to help with issues and enquiries to support the BDMs who are out in the field meeting brokers every day.
We know only too well how frustrating it can be for brokers if they have to wait days for an answer, particularly in an industry like bridging, where time really is of the essence, which is why we have brought this team on board.
There are plans to further expand this team, too, to deliver even greater levels of support to intermediaries, as well as to increase the size of our buy-to-let underwriting team, as we look to ramp up our lending in this space.