But there will always be times when turning to conventional banks for support is not the way to go. In fact, mainstream lenders can be surprisingly inflexible when a borrower’s needs cannot be met by any of their standard ‘off-the-shelf’ financial products.
In each of the following instances, in particular, it may be practically impossible to secure the financial support you need from a mainstream bank or lender.
1. When time is a factor
Borrowing significant sums of money from a conventional lender typically means enduring a near-endless application and underwriting process. Average mortgage underwriting times are currently around 12 weeks, rendering time-critical purchases and investments out of the question.
By contrast, a bridging loan for purchasing a property can often be arranged within just a few working days; ideal for taking advantage of property purchase opportunities that will not be around for long.
2. When looking to borrow money short-term
Most of the products and services offered by banks are relatively long-term in nature. This is particularly true when it comes to loans and mortgages, where early repayment paves the way for penalties and other transaction fees.
On the specialist lending market, funds can be raised for any purpose over periods of anything from one week to several years. If you would prefer to repay your debt as quickly as possible to save money, you can do just that.
3. When your credit history is not up to scratch
The overwhelming majority of mainstream lenders turn away applicants with poor credit at the door. Unless you have an excellent credit score, you can forget about qualifying for a mortgage, an unsecured personal loan or any other consumer credit facility.
Bridging lenders adopt a different approach, wherein applications are judged on the basis of their overall merit. Even with poor credit and/or a history of bankruptcy, it is still possible to qualify for affordable bridging finance.
4. When you cannot provide proof of income
Likewise, if you cannot provide formal proof of income and your current employment status, you are highly unlikely to qualify for any conventional financial product available from a mainstream lender. Irrespective of the size or nature of the facility you need, your application will not even be given fair consideration. Elsewhere, secured loans from specialist lenders can often be accessed with no proof of income required, and no evidence of employment status necessary.
5. When you want to buy a non-standard property
The mortgages and property loans issued by mainstream banks are typically restricted to the purchase of habitable properties in a good state of repair. Purchasing rundown properties to be ‘flipped’ for profit is often out of the equation, as they are considered unmortgageable.
Consequently, property developers and investors tend to seek support from development finance specialists and commercial bridging loan providers; both of which are willing to lend against almost any type of property, irrespective of its condition at the time.