Specialist lender Blemain is warning brokers to check the stability of business partners before entering in to a short or long term business relationship with bridging finance lenders.
It says brokers have expressed concerns over the announcements of bridging lenders Mathon Finance and Excel Securities, going into administration, joining Link-bridging who had to cease trading a few months ago.
These concerns focus on the stability of lenders, particularly new entrants and those lenders who have been over ambitious with their products and LTVs.
Blemain says brokers are now seeking reassurances, for both themselves and their clients that the lenders are stable, can honour the deal that is on offer and that the products have taken into account an achievable and realistic exit route.
It says over the past few years there have been several lenders who have found themselves exposed by over aggressive products that led to an exit route being almost impossible to find. This leaves the broker in a difficult situation as they have obviously advised their client that bridging finance is a suitable option.
Gary Bailey, director at Blemain Group, says: “We are sorry to hear the news that several bridging firms have recently gone into administration. However, I always recommend brokers assess their lender options and be confident that the lender is experienced, well funded and can fulfil their loan and remuneration commitments.
“We remain 100% committed to the market, which has been proven over the past 2-3 years, and still have a strong appetite for new lending, considering the whole spectrum of a client’s credit status and property type.”