Don't be put off by pervasive myths surrounding this rapidly growing corner of mortgage finance, writes Pepper Money chief executive Mario Rehayem
Imagine being in a situation where every door seems closed. You've faced financial setbacks, perhaps due to a job loss, medical emergency, or other unexpected life events. Traditional banks have turned you away, leaving you feeling hopeless and stuck. This is where a specialist loan can truly be life changing.
Despite being a lifeline for those who have been knocked back by traditional banks, there are common misconceptions that still cloud the true potential of specialist lending. As someone deeply experienced and passionate about the non-bank industry, it's time to clear up these myths and highlight why specialist lending is not only beneficial for borrowers but also incredibly rewarding for brokers.
Three realities of specialist lending
1. Specialist lending is not only for high-risk borrowers
One of the most pervasive misconceptions is that specialist lending is solely for high-risk borrowers with poor credit histories. This couldn't be further from the truth.
Specialist lenders cater to individuals with unique financial situations, but this doesn't mean they are inherently high risk. Life is full of unexpected twists and turns. Many borrowers have faced temporary setbacks such as job loss or personal crises that have impacted their financial position. These individuals are not poor money managers; they have simply encountered challenging circumstances that might just be short term.
Specialist lending is about understanding these unique situations and providing solutions that help borrowers get back on their feet. It's about looking outside the box and assessing the overall position and potential of the borrower.
2. Specialist lending is not hard work
Some brokers might believe that specialist lending is more complicated and time consuming than traditional lending. However, this is not the case. With advancements in technology and streamlined processes, specialist lending has become more accessible and efficient.
At Pepper Money, we have invested heavily in digital platforms that simplify the application process, making it easier for brokers to navigate and manage. Our simple and user-friendly pre-application tool called the Pepper Product Selector (PPS) allows brokers to quickly and easily understand if Pepper Money has an option for their client with an indicative rate and repayment. The PPS technology leverages credit data integrations to automate the process and takes all the guesswork out in a matter of minutes.
In an industry where customer service is key, one of the critical ingredients is conversion. Industry reporting shows that Pepper Money continues to convert at a higher rate than other non-banks. When a broker successfully converts a customer’s application it showcases their product knowledge and experience. It's a testament to their dedication and skill, proving they have what it takes to navigate through a myriad of loan options and deliver exceptional results for their clients.
3. Non-bank specialist lenders are not a short-term fix
As borrowers' financial situations change, non-bank lenders can offer refinancing options, rate adjustments, and other modifications to ensure the loan remains competitive and beneficial.
This adaptability helps borrowers manage their finances more effectively over the long term. At Pepper Money, we can – and do – work with brokers to reassess their clients’ rate and overall position as their situation changes to give them options across a lifetime of lending needs.
Why specialist lending is rewarding for brokers
- Expanding client base
Specialist lending allows brokers to expand their client base by catering to a broader range of borrowers. By offering solutions to those who may not qualify for traditional loans, you can attract new clients and build long-term relationships. This not only increases business volume but also enhances your reputation as a versatile and resourceful broker.
- Providing real solutions
There is immense satisfaction in helping clients who have been turned away by traditional lenders. Specialist lending enables brokers to provide real solutions to borrowers facing unique financial challenges. By securing the right loan for these clients, brokers play a pivotal role.
How rewarding can it be to restore a sense of hope and dignity for someone? It reassures them that their financial past doesn't define their future and that there are still opportunities to rebuild and move forward.
- Building expertise
Specialist lending requires a deep understanding of various financial products and borrower profiles. By delving into this segment, you can build your expertise and differentiate yourself in market. This specialised knowledge is highly valued and can lead to increased referrals and repeat business.
The future of specialist lending
As the financial landscape continues to evolve, the demand for specialist lending is only growing. More borrowers will seek flexible and tailored solutions that address their unique circumstances. For brokers, this presents a significant opportunity to expand their services and make a meaningful impact on their clients' lives.
At Pepper Money, we are committed to supporting brokers on this journey. We provide the tools, resources, and expertise needed to navigate the specialist lending market effectively. By working together, we can debunk the misconceptions, unlock
the rewards, and ensure that more borrowers have access to the helpful loan options they need.
Specialist lending is not just about providing loans; it's about creating financial inclusion and fostering a customer for life. Whether it's buying a home, starting a business, or consolidating debt, these customers need the financial support needed
to turn dreams into reality. This can lead to a profound sense of accomplishment and stability.
For brokers, it's an opportunity to expand their horizons, build expertise, and make a real difference. Let's embrace the possibilities that a helpful loan option provides for someone who really needs it and continue to change people’s lives.
