Game of Loans: Is alternative funding alternative?

Is alternative funding alternative?



One thing that you will never forget is your mother’s maiden name..

One thing that you will never forget is your mother’s maiden name. For some reason, when dealing with large organisations, this is the ‘go-to’ question that proves you are who you say you are. I find that any desire to speak to a company quickly disappears after pressing option three and listening to that nauseating holding music for any length of time. Although this applies to most large organisations, it is just the beginning when dealing with a high street lender - especially if you are applying for a development loan. Be it your first pet’s name or mother’s maiden name there are a series of hoops to jump through even before you get to the application form.

You wouldn’t think we have a severe shortage of housing in this country.

It’s this lack of service or proactivity that has helped to fuel the rise of the alternative finance sector, which in my opinion is probably more mainstream than alternative these days. The beauty of dealing with Regentsmead for a development loan is that there is no need for you to remember your mother’s maiden name. The advantage of being a small firm is that when one of our clients phones the office, everyone knows who they are. This, of course, includes all the details about their latest project, where it is and what they are building. This, after all, is their livelihood, so why not show some interest?

I recently found myself a situation where my building society rang and then asked me questions to confirm who I was. Whilst it’s always good to get an on-the-spot pub quiz about my life – it keeps me on my toes - it certainly doesn’t generate any warmth I have for the building society I bank with.

Since the recession, we have seen a huge amount of new lenders enter the market to provide further ‘alternatives’ to the high street lenders. Anyone from bridging lenders to peer-to-peer funders are trying their hand at development finance because the high street banks still lack a distinct appetite for this form of lending. Some clients I speak to, and who are particularly rate sensitive, have tried to jump through the banks’ hoops in order to secure high street funding. More often than not, however, I find that they return to us – and are willing to pay a slightly higher rate in order to do business with a real person who really understands development finance - and won’t repeatedly ask them for their mother’s maiden name.

 


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