The broker route
Development finance brokers act as intermediaries between borrowers and lenders. A good broker brings market knowledge, established lender relationships, and experience in packaging deals. They typically charge 0.5–1.5% of the loan facility as a fee, paid on completion.
Advantages of using a broker:
- Access to a wider panel of lenders, including those who only work through intermediaries.
- Knowledge of which lenders are actively lending and what their current appetite is.
- Experience in packaging deals and writing credit papers that get approvals.
- Negotiation on rates and terms — brokers with volume can sometimes access preferential pricing.
- Process management — handling the back-and-forth between borrower, lender, valuer, and solicitors.
Disadvantages:
- Additional cost — broker fees add to total project costs.
- Quality varies enormously — an inexperienced broker can be worse than going direct.
- Potential conflicts of interest — some brokers favour lenders who pay higher procuration fees.
- Speed — adding another party to the process can slow communication.
The direct route
Going direct to lenders means approaching them yourself with your deal information. This can work well if you know which lenders to approach and can present a professional application.
Advantages of going direct:
- No broker fee — saving 0.5–1.5% of the facility.
- Direct relationship with the lender, which can be valuable for future deals.
- Faster communication — no intermediary translating messages.
Disadvantages:
- Limited market access — you can only approach lenders you know about.
- Time-consuming — researching lenders, preparing applications, managing the process yourself.
- Risk of approaching the wrong lenders — wasting time on lenders whose mandate doesn't fit.
The technology route
A third option is emerging: platforms that automate the deal packaging and lender matching process. Rather than paying a broker to manually write a credit paper and make phone calls, technology can analyse your deal, generate a professional credit paper, and match it to lenders whose mandate fits — in hours rather than weeks.
This combines the market access of a broker with the cost efficiency of going direct. Assesr was built for exactly this purpose — bridging the gap between borrowers and lenders without the traditional intermediary model.
Frequently asked questions
Can I use a broker and a platform?
Yes. Some brokers use technology platforms to enhance their own deal packaging. And some borrowers use a platform to generate their credit paper and then engage a broker for negotiation and process management. The two approaches are not mutually exclusive.