How to Sort 60+ Lenders Quickly
In today’s digital world, it’s not so much a problem of finding a good number of lenders (although not all advertise), but more how you actually sort through them, filter them, and in the end rate them for further attention and progress.
Many a developer has been left frustrated when shortlisting a competitive lender only to find as the applicant they don’t fit the lender's product criteria for one reason or another.
How to solve this?
Before you spend too much time analysing the lender’s rate, fees and their total finance costs, you need to see if, firstly, you will qualify under their credit policy criteria. The key early areas are:
- Min Loan/Max Loan considered
- Geography covered
- Max Loan to GDV threshold
- Max Loan to Cost threshold
- PG serviceability
In a bit more detail:
Is your loan within their minimum and maximum loan parameters?
Many lenders for example start at £1m, so if you’re below that threshold, ensure the lenders you are talking to can lend at your amount and vice versa.
Does the lender cover your geographical location?
Whilst London/South East England focused lenders have looked further afield around the UK in the last couple of years, that does not mean they will have appetite for your location, so do check. Increasingly, lenders have postcode restrictions at part of their Credit Policy. For example, some lenders might say they lend in Scotland and Wales but what they really mean is they lend only in Edinburgh, Glasgow and Cardiff.
Is your loan within their Maximum Gross Loan to GDV threshold?
You will only know your net Loan to GDV because you won’t be able to accurately add on the interest and fees to get the Gross. As a safe guide, if you net loan requirement exceeds 60% of GDV, you will probably need to put in more cash in order to remain within most lenders' threshold parameters.
Are you putting enough cash in to hit their Loan to Cost Ratio?
Most lenders will lend up to 90% Loan to Cost, i.e. you need to put in 10% of the total project costs. Some though will only lend 75% of Costs, so your cash-in requirements can vary enormously from lender to lender.
Are you able to qualify for their PG requirements?
PG commitments again vary, and it’s important you understand the lender’s stance early to ensure you qualify. PG requirements can be anything from zero, to 20% of the loan fixed and capped, to a full 100%.
So understanding how to filter down your options quickly can save you a lot of time in the early stages.
Want to sort 60+ lending options even quicker, with a full list?
We do this all the time as you’ve probably gathered, and have a ready to go list for you to use and assess immediately.
If you want to gain access to this free and exclusive tool, click on the link below to request:
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