Introducer Today

Commercial

Brokers call for more commercial lender support

David Burrows, Managing Director, Secured Loan Services

Sourcing systems have grown almost beyond recognition in the past 10 years. What started as paper booklets with a handful of mortgage products that were posted to brokers on a weekly basis has evolved into the highly sophisticated, advanced technological sourcing systems that we know today. At least that has been the case with the residential marketplace, but what of the commercial sector?

It has witnessed a growing number of commercial mortgage lenders enter the UK market. These players need brokers to support their product offerings and hence some have been making overtures to residential brokers about how they can increase their fee income by helping clients with commercial mortgage enquiries. But those that have decided to take up the offer have been struck by the lack of access to online mortgage systems for selling, processing and managing commercial business.

Within the residential, broker-distributed mortgage sector, technology is regarded as one of the major ways in which lenders can gain a competitive edge by offering fast, seamless systems to brokers. It’s simple – if brokers can secure an online offer while the customer is still sitting across the desk, why would that customer want to go elsewhere? Lenders do not seem as keen to show the same urgency in the commercial sector. That is not to say there are no facilities for online product sourcing, just that generally speaking, they are very much more limited and resemble the marketing tools that the first residential systems were.

There is no doubt that the commercial sector lags behind in the provision of the sort of online facilities that are now standard in the residential field. This is because the availability of commercial mortgages through brokers is a relatively new phenomenon.

Obtaining a commercial mortgage was once largely a matter of the would-be borrower approaching their existing provider of banking facilities to negotiate a deal. This approach has no need for sophisticated online systems, so there was nothing to build on as the market moved into broker distribution. Although new lenders have entered the market, it is a young and growing sector and the resources required to set up online application and processing facilities can be prohibitive.

The fact that there is a great variety in lending makes the process of building systems that much harder. But if these players are serious about using the intermediary sector as a means of distribution, they must build and develop systems that are much more in tune with what residential brokers have now become used to. It was only relatively recently that online Decision in Principle functions were introduced for brokers dealing in commercial business. But things are changing.

Online systems are now becoming more user-friendly. Moneyfacts shocked the market this month (September) when it launched a free online sourcing system and adviser portal featuring commercial mortgage products as well as residential, sub-prime and buy-to-let. Time will tell how well the functionality of this system works and whether it will be replicated elsewhere.