By David Stevenson on Thursday 9 June 2016
Fundbay targets commercial finance brokers with product agnostic, free to lender offering which will include P2P platforms The alternative finance revolution may harbour ambitions of disrupting the traditional intermediary advice space, but many commercial finance brokers have so far appeared reluctant to embrace massive changes to their business models. Most commercial brokers will argue that they provide their SME customers with a full range of products, including alternative lenders, but many critics suspect that in reality their favoured default providers come from a much narrower range of frequently traditional providers.
To be fair some innovative commercial brokers have enthusiastically embraced alternative finance options, but until fairly recently many professionals in this space have lacked the online tools to fully map out the full market. Fundbay aims to solve this problem and give all commercial finance brokers access to the full market via its new platform which is officially launching on the 15th June at the NACFB Expo event at Birmingham’s NEC.
The new platform offers one big positive – it says that there is no cost for lenders. The platform’s developers want to include as many alternative providers as they can, which should be music to the ears of hard pressed business development execs at lending platforms!
How does this new platform work? According to James Booker, Fundbay’s director, its “a dating platform for broker and lenders to meet”. In simple terms the website is an online marketplace where brokers advertise property loans to a community of lenders, on behalf of their clients. Crucially it’s a ‘broker only tool' that allows brokers to list ANY funding requirement, under any terms. The website doesn’t run any detailed due diligence on a borrower but simply checks through the loan description to ensure that each lending proposal answers the basic questions any lender would initially want to understand about a case.
Lenders can register for free and set their 'approximate' lending criteria. This includes; min/max loan, min/max rate, min/max duration, loan purpose and borrower type. When a listing has been approved a request for payment goes directly to the client, or the broker. The listing cost is £199 and the broker receives £100 cash-back on each listing. The listing then goes live for a maximum of 21 days, or until an 'offer-of-funding' has been accepted by the broker, on behalf of their client.
To create a listing, a broker will identify the property using Google Streetview and take photos, or upload their own images. The broker is prompted to describe the various details of the lending scenario and upload the client’s supporting documents. 'Loan Alert' emails are then sent to lenders once a day with deals that match their lending criteria. A lender can set multiple alerts, and have many recipients.
Fundbay says it will only make a £99 profit on each listing. “It’s not going to make us rich”, says James, “what it will do is hopefully make the whole industry more compliant under the new obligations imposed by FCA regulation, and make it easier for all brokers to place deals”.
Brokers may well move over to this new website because in a more tightly regulated environment, commercial brokers now need to make a record of evidence (RoE) detailing the choice of lenders they presented the case to, the final lender selected, and their reason for doing so, particularly in the case of individual borrowers. In the residential lending market this regulatory trail is covered by products such as Tri-Gold and Mortgage Brain – Fundbay aims to provide a similar service for commercial finance brokers.
Fundbay – in beta development since October 2015 and boasting 100 individual lending managers signed up – has been developed in conjunction with James Booker's established business 'B2Bmortgage'; a commercial mortgage brokerage processing over 400 UK commercial lending enquiries each month.
More details at www.fundbay.co.uk