The Intermediary – June 2025 - Flipbook - Page 53
SPECIALIST FINANCE
Opinion
without making huge efforts to
advertise them.
required loan, and thus offering
unusually aractive rates.
Unadvertised deals
Lender personality
I would say that a debt broker’s
greatest strength is their insider
knowledge. The best brokers are
constantly on the lookout for the very
best deals, and gain this insight by
meeting with lenders and scrutinising
the debt market on a daily basis. At
Excellion, we pride ourselves on the
fact that there is not a deal out there
we don’t have eyes on.
A property investor who is rightly
focusing their aention and expertise
on which asset to acquire, and how
best to refurbish or convert it, simply
doesn’t have the time required to
stay fastidiously in the loop with
debt offerings.
Nevertheless, having a
comprehensive rolodex of available
deals is useless unless you also know
what sort of project they’re most suited
to. So, a broker’s insider knowledge
must be matched with the experience
required to know the best available
deals to suit each given project that an
investor brings to them.
On top of that, brokers should also
be aware of which deals lenders are
realistically going to approve, because
the deals they advertise on their
websites, which are frequently out
of date anyway, are usually the most
‘aractive’, such as 90% loan-to-cost
(LTC) and pricing as low as 0.70% per
month, which, in reality, are only
going to be approved under the rarest
of circumstances.
Speaking of what lenders are
actually likely to lend, a good broker
is also able to create some competitive
tension by having multiple lenders
actively bidding to provide the
As well as knowing which deals
are currently available to suit an
investor’s requirements, and which
deals are most likely to be approved,
a good debt broker is also familiar
with the nuances and idiosyncrasies
of each given lender, as well as their
sentiment towards each specific type
of development, such as, in this case,
HMO conversions.
I, for instance, know that some
lenders insist on seeing a detailed track
record from the developer that shows
specific experience in developing the
asset being built – such as purpose
built student accommodation
(PBSA) – whereas others are willing
to be more flexible, where general
development experience is enough.
Some want 100% personal
guarantees (PGs), while others want
smaller PGs or none at all. We take the
time to understand this, which saves a
lot of time when it comes to selecting
the right lender for any given project.
Being familiar with the quirks
of each lender also means a broker
understands each of their credit
processes, such as how long they take
and how commercially minded they
are. As a former banker myself, I have
a particularly strong understanding of
how these credit processes work.
This understanding of nuance also
means that a broker can be on-hand
to find the investment loan that an
investor will need in order to exit the
bridge loan.
Brokerage is about advising an
investor every step of the way,
providing detailed knowledge on
aspects of the deal that they don’t yet
know about. Any investor who is
looking to partner with a debt broker
must ensure that they select a broker
who is very much going to work for
them, not the lenders.
While many relationship managers
will view the borrower as the client,
the actual fact is that they work for the
lender’s shareholders.
This is a critical difference, because
if things go wrong, I have personally
seen lenders suffering internal
difficulties – such as regulatory issues,
loss of funding or a run of defaulted
loans – and quickly turning their back
on previously favoured borrowers,
cancelling previously approved loans,
sharply raising rates on refinance, or
looking for ways to exit an existing
loan. Not every lender operates this
way – I have worked for lenders that
are very reasonable – but it is a crucial
point that needs to be considered.
A broker must be on the borrower’s
side at all times, with no conflicting
interests that might cause them to
push an investor towards a deal that is
less than optimal for them and their
circumstances.
My firm view is that debt brokerage
should be a collaborative process –
the relationship between me and
my clients is one of creative and
strategic partners rather than teacher
and student.
An investor has unmatched
expertise in the processes of acquiring
assets, converting them, and
extracting profit from that endeavour,
while I bring to the table my ability
to pair that vision with the most
appropriate and least cumbersome
financing available.
It is through this partnership of
shared knowledge and passion that the
greatest successes are found. ●
June 2025 | The Intermediary
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