The role of banks within society has changed dramatically. This is clearly illustrated by the ongoing closures of banks that are household names on local high streets.
The role of the bank manager, at one time, was one which involved building strong relationships with business customers.
Since 2008, retail banks have attempted to realign themselves and offset the distrust arising from the crash by creating relationship managers.
“Many banks are looking to balance risk and reward, but often this comes across as simply being risk averse.”
“Despite the major retail banks having staff dedicated to managing client relationships, their numbers are in decline, and customers are finding they must apply for loans online”
A Lack of Choice and Awareness
“How aware are people of the alternative means of funding available to them if they’re in property development? Anecdotal evidence suggests that developers and other SMEs cannot see beyond the mainstream banks’ products.”
These include standard loans and mortgages, which some people find too inflexible or simply out of their reach.
“Like many other SMEs, property developers are suffering from a lack of finance, with banks cutting the amount they will lend in relation to a property’s value. However, what also matters, is that they are suffering from a lack of knowledge.”
Raising Awareness of Alternatives
“It may be more of a communication and information problem than a financial one. The market for alternative finance for property developers is a growing one, but the key is raising their awareness of these options.”
There is also the issue of trust.
“What has been missing from banking relationships is the sense of relationship-building, where the customer’s specific needs require a tailored approach and while alternative financing can do this, the property developer still needs to have that essential element of trust”
Specific products available to property developers, such as bridging loans, development loans, land purchases, commercial mortgages, refurbishment loans and other specialist funding options should make things more attractive and easier for them. But only if they make the right choice.
Blue Bull Finance offers a one-stop shop solution for property developers looking for finance.
“It’s about laying out all the alternatives, and ensuring that the customer has complete clarity about the options open to them. It also means we help match the customer to the means of funding that will best suit their project.”
“This is very much relationship-based, offering the kind of personal, bespoke service that was once the preserve of local high street banks,” Rick concludes.