iscover
Private lenders are “essential” in the modern lending market, said Adam Gringlas, managing director of Jadig Finance and Simple Property Loans.
In a discussion with Broker Daily, he delved into the need for these types of lenders to help cater to the less traditional type of borrower.
Traditional banks are pulling away from the riskier borrower who requires more flexibility, said Gringlas.
He said that these borrowers are becoming increasingly frustrated with the red tape and inconsistent credit policies provided by traditional lenders.
“Banks have become increasingly process-heavy and regulated, leaving borrowers stuck in bureaucratic loops. Even for low-risk, asset-backed loans, the hoops borrowers must jump through are disproportionate,” Gringlas explained.
“This creates a clear gap that private lenders are now filling by offering practical, common-sense credit assessments.”
This is where brokers are helping bridge the gap by providing options for borrowers with more complex circumstances.
“A broker’s market access, product knowledge, and ability to de-risk and streamline the loan process is re-shaping the market, and capable, organised brokers are thriving. Greater competition will continue to drive a lift in broker standards, which is a positive for the market,” said Gringlas.
He said that both Jadig Finance and Simple Property Loans are leveraging broker relationships more and more as the need for flexible lenders increases.
Further to this is the importance of speed. Borrowers are increasingly seeking quick turnaround times, especially SMEs that need access to capital fast.
Gringlas said the banks risk losing relevance if they do not adapt and meet the level of service provided by brokers.
[Related: SMEs increasingly turning to non-banks for finance needs]
