As a company that has access to private funds, we’re able to act quicker and provide more flexibility in comparison to other lenders. But what are the benefits of private funding and how do they affect what you can borrow?
What is private funding?
Private funding refers to where the funds come from and how the loans are fulfilled. With private funding, the company’s owners are the people who provide the money that is lent to applicants who apply for a loan.
Velocity Bridging is 100% privately owned and privately funded meaning our decision-makers can make a decision on your application in minutes and our access to funding is almost immediate.
What are other types of funding?
There are three main funding methods available for lenders like us; private funding, institutional funding and crowdfunding.
Institutional funding
Institutional funding means that the company borrows money from another company to then lend out themselves. This is typically how the larger bridging lenders work. This money could be from pension funds, banks or even other lenders!
Lenders who use institutional funding can access very large sums of money however there are some major drawbacks to this. Because the funds are coming from a third party, a strict criterion is often set for what kind of deals the money is used for, and they will also want to see a minimum return on their investment.
These strict criteria mean these lenders can only accept applications that fit a certain box and can provide no flexibility when it comes to pricing. The rigidness of institutional funding is also known for being notoriously slow with decisions which can leave both borrowers and brokers in a lending limbo for weeks.
Crowdfunding/P2P
There are a few major lenders that use crowdfunding to get their money. This method of funding means the company gets its money from a large number of retail investors. Usually, the lender will advertise a deal on its platform for their investors to see and they will commit X amount towards it based on whether they believe it’s a good deal or not.
What are the benefits of private funding?
Unlike institutional funding, private funding provides the speed and flexibility that is crucial in the world of bridging. The benefits of private funding are:
Decision-makers on the front line
We are known for speed. One of the reasons we can be so quick is that our principle investor is only a phone call away, meaning we can get the go-ahead to tackle a quirky deal or take a view on a rough edge almost immediately.
No waiting around for a credit committee to make a decision.
Direct access to funds
Because our decision-makers are only a quick call away, this means once a decision has been made, we can request funds are sent to our solicitor and they will be sent almost immediately.
Flexible lending criteria
We aren’t bound by concrete criteria dictated from on high. We have the ability to judge each case on its merits and offer solutions to complex scenarios.
It’s how we’re constantly able to offer cutting-edge products and why many brokers use us for their more complicated deals.
Why choose Velocity Bridging?
As we have no third-party restraints, or set criteria, we are able to tackle cases that don’t fit in a box and offer a bespoke loan. We’re able to meet the needs of the market and create products that are extremely competitive, such as our auction finance and residential finance products.
It’s all about speed and flexibility – both of which are often absent when institutional funding is involved!
Alongside our flexible and bespoke products, we also pride ourselves on our service and communication. Unlike larger companies, we’re always available and will deal with your enquiry quickly. There is no “computer says no” attitude at Velocity – we have the ability to judge each case on its merits.
Want to get in touch to discuss your case? Give us a call or drop us an email. We’d love to hear from you!