Interview with Nigel Alexander

Fincorp's view: Should bridging lenders help people get a better credit history?

The debate over whether bridging lenders should aim to be mainstream or should offer a service to lenders with poor credit histories certainly has the industry talking. Here, Nigel Alexander, director at Fincorp, shares his views.

Should bridging lenders lend to borrowers with poor or no credit history?

No. In the past bridging lenders had a reputation for lending to borrowers with poor credit histories because they couldn't get funding elsewhere. However, nowadays not even good borrowers can get funding from mainstream lenders so they are seeking alternatives.

Does this put the sector in a negative light?

Yes. Bridging lenders don't have to do that any more. That type of lending stopped before the credit crunch. But it must be remembered even people with poor credit histories could get money from mainstream lenders before the credit crunch. That was the whole basis of the credit crunch – sub-prime lending. Bridging finance is seen as easier as there are fewer questions asked but the customers are of a better quality now than in the past.

What do you think of the comparison to loan sharks?

In the past that was probably true of some lenders – certainly not us, but some. Bridging had a bad reputation because rates were thought to be extortionately high but they're actually quite competitive now.

So who is a typical bridging customer?

People who need finance quickly. For example, with buy–to–let properties, a buy–to–let mortgage takes 12 weeks to come through, but if you buy at auction you need that funding within four weeks. Most of our customer are professionals. We don't have much experience of dealing with Mr and Mrs Joe Bloggs. Most of our customers have a discernible track record in property.

Will bridging finance ever be classed as mainstream?

I think it will always be niche but it is being viewed as mainstream because mainstream lenders are not really open for business. While they are not open for business bridging finance will always provide an alternative.