Last month, we carried out a UK-wide survey to help us understand the wider perceptions of access to loans and finance and found a general lack of awareness of the many alternatives to the mainstream lenders.
The research showed that 46 per cent felt it was more difficult to obtain finance for property now than in the past, yet the growth in the alternative finance sector proves that there’s more choice than ever before when it comes to finding the right funding.
Specialist lenders, crowdfunding and peer-to-peer lenders all take very different approaches to the more traditional forms of funding and can serve a variety of needs.
For example, almost a half of those surveyed believe that credit rating will make the biggest difference in a loan being accepted. With specialist lenders like ourselves, that’s simply not true.
At Together, our decisions are based on the individual circumstances, rather than a rigid criteria and computerised credit score. We call it common sense lending and essentially it’s this that sets us apart from the mainstream.
For commercial clients and those buying at auction, it’s usually speed that is the reason for turning to a specialist. Whilst the mainstream perception is that loan applications take a long time – over a fifth of those we surveyed felt this was the case – in fact specialist providers can provide funding in incredibly tight timescales, which a traditional lender may struggle to deliver.
A quarter of those we surveyed felt that loans are processed with little attention to individual circumstances, but again, with a specialist lender, this isn’t the case. Looking at each application on a case-by-case basis, we have greater flexibility than a mainstream lender.
Auction property purchases are a good example of this. There are certain issues that can potentially arise with properties bought at auction that would stop a high street lender from providing a mortgage.
For example, if the kitchen or bathroom are in a condition considered unsanitary, the buyer will have difficulty obtaining finance from a traditional bank, whereas if the buyer intends to renovate the property, we’d take that into consideration and bear it in mind when reviewing the application. Ultimately it’s that individual approach that’s going to make the difference that would result in the purchaser getting the funds he needs.
The growth across the alternative finance sector looks set to continue and that will bring with it greater awareness, but hopefully in the meantime, we can help drive that process by letting people know that when it comes to finding the right funding, there are plenty of options out there – you just need to know where to look.