Increasing volume: why dialogue between borrowers, lenders and brokers is essential
You’re finally ready to sit down, turn on the TV and relax watching your favorite new drama series from one of the new streaming services that have entered our lives, such as Netflix, Prime TV, Disney+ and Apple. TV+ . And yet, you find yourself unable to properly hear what the characters are saying. A recurring story concerns the audio, or to be more precise, the inability of many people to hear what the characters are saying. Some blame the music, others the sound effects, while for others the main culprits are the actors.
Regardless of who or what is to blame, at the end of the day there is no understanding of what is happening in the story and you are confused as to what is likely to happen in the future. This, indeed, underlines the importance of dialogue.
Of course, dialogue is crucial elsewhere. At London Credit we would like to stress the importance for brokers to maintain a dialogue with clients in this difficult economic environment once a loan has been drawn down. It is equally important that a conversation between the lender and the broker continues as well.
The summer 2022 market is very different from what it was a few years ago, and although during the pandemic we have faced significant challenges due to supply chain and labor issues. work, we weren’t operating in a highly inflationary environment like we are now. These factors can mean that in today’s climate, the best-laid plans can very easily go awry.
Exit strategies are therefore more vital than ever. I recently wrote in the trade press about how having a Plan B and even a Plan C can make the difference between getting a bridge loan application approved or rejected; establishing alternative exit strategies can reassure the bridge lender that the borrower is realistic about the current market and is not tied to a single exit route from the bridge loan.
Going hand in hand with this should be the borrower-broker-lender dialogue. All parties in the relationship need to be clear about what is going on and what the options are. It is a mistake for any part of the triumvirate to think that the dialogue is over once the loan has been agreed and the funds released.
A bridge loan is not like a residential mortgage. Bridge loans are short-term, but circumstances can change quickly, so the initial exit strategy should also be revised to respond to this changing situation. This means that it is vitally important that brokers continue to maintain a dialogue with their clients after the completion of a bridge loan.
Brokers whose modus operandi is to maintain a dialogue with their clients will find that they are almost always on top of things and can maneuver as needed to arrange a quick and hassle-free exit for borrowers. Moreover, it means that they gain the confidence of the lender, which is extremely important for the future.
Sometimes the decisive parameter for a case to be approved by the lender is who is the broker behind it. If the broker has earned the trust of a lender by properly managing the exit of its borrowers’ loans in previous cases, this will count in the final assessment of the loan application and more often than not, who the broker could be a decisive factor. .
A dialogue failure in a new TV spy drama can prove frustrating and spoil the viewer’s enjoyment. However, a failure to communicate regularly and effectively could have far more serious consequences for a bridge loan borrower. Brokers have a vital role to play here and at London Credit we want to help them ensure that all parties can be heard and all parties can benefit from these healthy habits.