Bridging Finance Limited backs code of conduct

Manchester professionals are backing calls by the Council of Mortgage Lenders (CML) for the formation of a trade body that will introduce a code of conduct for the booming bridging loan industry. Management at Bridging Finance Limited is supporting the CML and is calling upon other industry heads to take part in a proposed scheme. Chris Baguley, managing director of Bridging Finance Limited, said: “We believe an independent industry-wide code of conduct for providers is long overdue and we are keen to ensure that the CML gets the support it needs. We fully endorse an independent initiative like this. It will give the industry more credibility and root out some of the less transparent players in the market.” “Bridging is the last unregulated part of the commercial finance industry and it needs a Code of Conduct to ensure that consumers, clients and introducers can have absolute confidence in the reputable providers.” Mike Hymanson, equity partner of Manchester law firm Lewis Hymanson Small, agrees: “Increasing numbers of clients are using bridging finance facilities in order to fund growth and exploit new business opportunities. Having a clear set of guidelines on best practice would be a big step forward. Such a scheme would help people avoid the bad apples and ensure they make use of reputable operators in the market.” Bridging Finance Limited is calling for the following five measures to be laid out in new guidelines:

• A flexible 12 month facility being offered to give the client confidence that the terms will remain the same in the event that the bridge runs over the average 2/3 month period
• All fees to be clearly stated on the offer document or illustration at the outset so customers and advisers can make fair comparisons
• Fees to introducers to be within reasonable levels and communicated to borrowers embracing an approach to ‘treating customers fairly’
• Structuring a transaction appropriately and looking at whether the facility would be better suited on a longer term mortgage by understanding how the facility is to be repaid/exited.
• Documentation to be clear and easy to understand, written in jargon-free English and embracing complete transparency