Everyone who has ever had a dream, whether it’s to build your own home, travel to the moon, own a fancy car or build an empire, has usually had to find the money to finance that dream. In a perfect world we would all work, earn a living and pay for what we want to do without any kind of debt. This, unfortunately, is not a perfect world.
Shakespeare wrote in Hamlet “Never a borrower nor a lender be”; when it comes to friends borrowing from, and lending to, each other that is very sage advice. However, the property world turns on a lender’s ability to provide funding to people to finance their dreams. Now that may sound fanciful especially when you’re looking at a multi-million pound operation. Nevertheless, no matter how big a company or corporation, at some point when it first started it was someone’s dream to build that company.
So, dreams are varied and as a result finance has to be diverse. If there was one set of rules, one type of finance, then we wouldn’t get very far. Lenders have to have the ability to assess the borrower’s situation and decide, and this is where it gets interesting.
No-one wants to suffer the often parodied ‘Computer says no’ situation, but there are cases where this may still happen. In this situation the ‘computer’ is the lender applying its very strict criteria and having no flexibility to enable it to bend to an individual’s circumstances. There are of course reasons that lenders have certain criteria, and more often than not these are laid down because of funding lines to minimise risk.
There are now more lenders that have a more flexible approach, whether through private funding or because the investment stream is more open to risk.
At Hope for instance, as a privately funded lender, we are able to make our own decisions, look at each case with a more entrepreneurial eye and find a way to help, rather than look for reasons not to lend. I wouldn’t say we exactly bend over backwards, but we have a very flexible attitude.
A more versatile approach is vital if future dreams are to be realised and we, and the world around us, continue to evolve.