Know Your Lender
At NapeX Finance, we believe it is essential that you ‘know your lender’, including how they are funded and their ability to support your business in the long-term, not just the short.
Why is this so important? Because over the last 10 years the financial market has transformed, and rapidly expanded with many new challenger banks, specialist lending platforms and peer-to-peer lenders being established. Due to the vast number of lenders in today’s market it has become more difficult for borrowers to understand who they should go to and the best options available to them.
In today’s now saturated market, it has led to many similarities between lenders and products which we feel has made it harder for lenders to differentiate themselves and their USP’s. Factors such as political, economic and market conditions can have a dramatic effect on a funders success and longevity. There are different risks associated with different lenders and our due diligence helps our clients paint a more informed picture.
The funding behind the lenders needs to give us certainty, and therefore our clients certainty, that the lenders are unlikely to pull out of the deal or lending market. Our aim is always to place our clients into safe hands.
A predominantly unregulated market presents opportunities and challenges alike. Frustratingly each lender differs, lending off of different values, different methods of calculating interest and different exit terms at the end of the loan. Therefore, it is of upmost importance that our clients understand all of these elements allowing them to make an informed decision before committing to any loan. Our experience as ex-lenders gives us a unique and invaluable insight into this world allowing us to deal with any challenges, and foresee and overcome any potential obstacles along the way.
Our process for onboarding our lenders is as follows:
How are they funded?
Understanding the may ways lenders are funded nowadays is key to ensuring our clients know who they are working with and the risks associated with that lender.
How long have they been trading?
This is an area of key importance. Whilst a lender being ‘new’ does not make them less stable it is important to make sure that the people behind the lending platform have valid experience and that their credit process and funding platform is strong.
What is their financial strength?
Yes, believe it or not this is a question you should ask of your lender and review any associated press. It’s essential to us that we know a lender is financially sound.
What is their appetite?
We invest time in understanding each of our lender’s true appetites, creating strong relationships with each lender, including getting to know where a lender may be flexible and push the boundaries of their normal criteria.
What are the rates and fees?
Our service does not simply concentrate on finding you the best rate. We look at the finer details of each loan offer to compare the overall costs including fees. Once all costs have been factored in, the lowest headline rate does not always guarantee the best option.