Will More Lenders Enter Bridging Finance Sector?

The bridging lending sector appears to be growing in terms of monies lent which is no doubt a very different situation to the immediate period following the economic recession. With this happening are we likely to see more lenders want to enter this market?

Are we likely to see an increase in the number of lenders providing bridging loans?
Would there be a benefit in more lenders providing bridging finance?

Well, as with most things in life, there are no doubt people with different thoughts in this respect. There will be some niche bridging loan companies that feel that some of the major commercial lenders are so big that they are not really able to respond to urgent bridging loan requests as quickly as a smaller company that specializes in providing bridging finance and, therefore, are not ideally suited to providing such finance.

However, with profit margins quite tight in respect of certain types of finance offered by some of the mainstream lenders could they not feel that bridging lending enables them to increase their profit margins? Also, when you consider that with the likes of closed bridging finance supported by a very good security margin as comfort such lending could be perceived as fairly low risk.

From the borrower’s point of view, the more lenders that enter the bridging loan sector must surely be a positive factor as this leads to increased competition between lenders that in turn could lead to more innovative bridging lending products coming onto the market. It could also result in lower interest rates and lower fees.

It could be argued that there is a place for a number of additional lenders to offer bridging finance. Some may feel that this particular lending sector is already saturated but there will be others that feel there is room for more companies to offer bridging finance. No doubt, if a new lender enters the bridging loan sector but subsequently feels, for whatever reason, that it is no longer for them then they could look to withdraw from providing such finance.

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