Over the last year, many new lenders have entered the bridging finance market. A recent poll by the website Bridging & Commercial found that 74% of respondents thought that there were now too many bridging finance lenders.
Some financial experts believe that fierce competition is beneficial for the bridging finance market. Competition keeps interest rates low and makes sure that processes and practices of bridging lenders are of a high standard. This benefits borrowers both in the cost of loans and the quality of service offered by lenders.
The challenge for bridging brokers is to be able to distinguish the various lenders so that they can recommend the best deals for their clients.
Many lenders entering the market cannot compete on price but provide specialist lending so they can appeal to a niche sector of borrowers.
Technology has been developed for bridging finance, and this can help speed up the loan application process. An example of this is an app that can be used to upload photos of a property involved in a loan application, which can speed up the process of a loan offer decision. Bridging loan lenders that offer technology can use this to attract borrowers.
Because of fierce competition, the profits of bridging finance lenders are low, and some lenders may feel that there are too many in the market. As far as most borrowers are concerned, as long as interest rates remain low, and service levels high, they will not be concerned about there being too much choice.