Getting it right up front
By Vishal Dixit, head of business development at Pivot
We believe it is invaluable for our intermediaries to spend adequate time when preparing a robust proposal for a lender. Given that each lender will vary on the information they need up front, it is perhaps understandable that the initial enquiry can sometimes contain insufficient detail - especially if the borrower is looking to move quickly to get a quote and it is being sent to multiple lenders.
However, from our experience, providing a full synopsis on the deal from the outset can go a long way in not only helping to get the deal approved, but also in allowing the borrower to complete on time and without any further costs. Having full transparency of the mechanics of a loan facility and effective communication between all relevant parties is key.
While no lender is expecting countless hours to be spent putting together a proposal, a case supported with information not available in the public domain will help paint a picture for short-term lenders, such as Pivot, which manually underwrite all deals. Manual underwriting allows us to look at cases more fairly when assessing an application, and consider all the information provided, as opposed to automated underwriting (often seen with high street lenders), which will ultimately be limited by the data entered to a list of predetermined questions.
Provision of the fundamental information a short-term loan request requires is imperative to a successful and appropriately structured facility. These include the reasons for needing a loan; asset descriptions; experience and credit worthiness of borrowers; as well as details on the proposed exit of our loan. Providing an explanation of any adverse credit in a proposal will ensure the deal is priced appropriately. Not only does this allow a deal to complete quicker, but also reduces the chance of a deal falling over, with the borrower having already spent on legal and valuation fees.
However, a good proposal isn’t just about providing the fundamental facts. Intermediaries need to think about how to eke out the quirks relating to a transaction and highlight any actions that have been taken to mitigate risks. This can easily become one of the most important steps in the process, particularly for non-vanilla loans, which may be difficult to place. Although at Pivot we will undertake our own independent research into every proposal, any information which can help tell the story behind a deal will always improve the likelihood of it being approved.
For lenders to be flexible and help facilitate the best solution for the borrowers we serve, we require a collaborative approach between all the parties involved, with transparency of information being key. We believe producing detailed and well-structured proposals are an integral part of the process and intermediaries that can serve their clients with these will soon build a reputation for this within the lender community. This will, in turn, benefit the intermediaries’ relationship with their borrowers and thus create a cyclical process that produces the optimal outcome for all.