Tiuta: The last six months

By Gareth Lewis, Head of Business Development at Tiuta plc,

We are now over half-way through 2011, the longest day has been and gone and, as I write this, we are just a mere six months away from Christmas Eve, which perhaps doesn’t bear thinking about.  The fact is that having reached this half-way point of the year, it gives us an opportunity to reflect on the bridging and short-term market up until this point and to perhaps speculate on what the rest of 2011 will bring our way.

Certainly from Tiuta’s point of view, 2011 has been an interesting year to date with a number of significant, rather well-publicised changes taking place at the business in recent months.  There have been a number of comings and goings, however, as we stand we can truly say that we have a strong strategy for growth going forward and a highly stable, experienced team here, which can deliver for all our stakeholders.

Our decision to focus exclusively on our core bridging loan activity means, day-in, day-out, we are working on the product areas and deals that are our strength.  We have been renowned for our work in the bridging sector over a number of years and, while we may have been offering other products particularly over the last year or so, we can say without fear of contradiction that our bridging loan proposition is one of (if not the) best in the marketplace.

Clearly, the bridging sector has seen a surge in the number of lenders in recent times, however, having talked to our introducers we are fully aware they value experience in this business.  In fact, there is no substitute for it, which is why following our decision to focus solely on bridging, we have seen the number of enquiries increase plus a record few months in terms of completed deals.

Brokers, intermediaries and agents all want an experienced hand on the tiller when it comes to dealing with their enquiries and developing a solution for their clients.  Certainly, in the world of short-term finance the ability to give a decision, and give it quickly, is vital however this has to be backed up by a focus on quality and a dedication to service and transparency.  Some of the new entrants to the market come with a pedigree and, no doubt, brokers, et al will be wanting to try them out and see if they can deliver. 

In a very true sense though, this is not a market where you can learn as you go along – once bitten, twice shy as the saying goes.  All established lenders know that customers will vote with their feet if the service is found to be wanting; at the start of any new offering reputation can be everything and a reputation for poor service can be easily attained and difficult to shake.

Given the recent increase in demand for short-term funding it is also vitally important that we do not lose sight of our lending responsibilities.  We saw only too well the mess left by the sub-prime sector a few years ago when an influx of get-rich-quick merchants flooded into the market with little understanding of the subtleties of the borrower and their needs.  The result was a quick dash up the risk curve, a cut in prices and, quite frankly, a blind eye to responsible lending practices.  The industry is still dealing with the aftermath of such lender policies.

It is to be hoped that our newer bridging entrants are not similarly taking on far too risky deals in an attempt to get loans (of any kind) on the book quickly at the expense of quality.  Regulators across the continent are already eyeing up the bridging sector and we do not want to provide them with fresh evidence that this is a marketplace which needs prescriptive rules and regulations.

All in all, the first six months of the year have brought positive news for the sector, indeed one could say it has been one of the few leading lights in financial services.  With such demand, and the appearance that there is money to be made, I fully expect to see more lenders dipping their toes into our market waters - at least in the short-term.  We should all hope that these ‘newbies’ come in with quality at the heart of their proposition and that they are not relying solely on slashed pricing and slack criteria in order to make their mark.