As we plunge into the final quarter of the year there seems to be no stopping the influx of new lenders, new money and new shiny products that promise so much.
Some probably deliver, to an extent, at least, but others are simply another case of “if it sounds too good to be true it probably is”. The “alternative” market has been booming since the banks became so difficult to deal with and seemingly, from the investor point of view, it still is.
As a result the bridging market is becoming pretty saturated and while there are plenty of pointers to show that the market is so much larger than it was, there is still a finite amount of business to be had.
So, the bridgers are now, it seems, turning their attentions, more and more, to the development finance sector. Perhaps they think it is an easy touch, an untapped seam of money or perhaps they just wonder how hard it can be?
Whatever the reason, the increase in competition is not necessarily the best thing for the client. But why not? More choice has to be better, right?
Not always. What if the choice is between an experienced company with a strong track record or new entrants, with a cheap (looking) offering that is not really fit for purpose – not that great a choice.
We understand that developers and builders are looking for the best deal and want to spend as little as they can on the finance. It’s just business. The cheapest deal, however is not always the best and can actually cost significantly more in the long run.
Whether you choose us or not, make sure you look at the overall loan cost, not just the rate. As mentioned before, a low rate can make a facility look to be cheaper than it actually is. For example, you need to know what the exit costs are and how long is the term?
The lowest rate in the market is no good if it is only for 6 months but you need 12.
How often and easy to get at are the draw downs? For a site to progress smoothly you need to be able to draw funds as and when you need them. What if those draw downs are dependant on a valuer’s opinion and the current plot value is not high enough – will you still get funded? Some lenders would stop the money, where would that leave you?
Richmond Securities are not really interested in shouting from the roof tops or putting together products that look fancy but that don’t really do anything new or actually work at all. Instead we think it better to concentrate on what we do best:
Providing finance for builders and developers that will be for a long enough period of time, with speedy draw downs and with as little hassle as possible from point A to B.
Oh, and our service is great too. In the last few weeks we have agreed funding for clients at the weekend and long past normal office hours.
Nothing new there, then.
We offer a product that has not changed much over the years, because it doesn’t need to. Our clients know they get great value, great service and a process that is designed with them in mind, not us.
So, as we come to the close of the year (though plenty of business to be done yet), we will carry on with our “if it ain’t broke don’t fix it” policy and just give our clients what they want.
Genuine development finance from a genuine development finance provider.
To get your project moving give us a call on 01492 879906 or fill in this quick form: