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Who wants to lend?

LOAN - just say 'No'

In the past few weeks three clients have asked me to source fairly good sized loans to help expand their businesses. Nothing unusual in that but once again the market was instructive.

The prospects were particularly strong and had excellent credit ratings. Also the lending was going towards a defined purpose and the security was strong. Add all this up and you would think that the lenders would be crawling over each other to fund. Not so

The problem was not that the appetite was missing but the whole procedure and responsiveness and this is where the established banks are going to continue to lose out. The contrast between the requirements of the new fintechs and the big four are vast. That could be countered by the claim that the old school lenders were being diligent but again that is on a fraction of the story

Business owners are busy people. They also tend not to appreciate excessive intrusiveness and reams of paperwork. In one case the bank were asking questions which were quite extraordinarily personal and which my client rightly refused to answer.

My clients (and myself) also expect their calls to be returned

Loans through fintechs frequently cost more but the gap is closing quickly. They pride themselves on keeping the applications slick and to the point and even more importantly they are driven by competition to act in an extremely timely manner

Two of my prospects have had banks sitting on applications for over two months now. My other prospect sourced through a finch and had the loan within a week

 

 

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