If you’re considering taking out a loan in 2022 – be that corporate finance, portfolio finance, a mortgage or any other kind of debt, here are four things to consider that will help you secure the most competitive deal.
How to get the best rates
At the highest level, securing the most competitive deal usually depends on how you present your case, negotiate, what you can offer a lender and who you approach for finance.
Logical, yes, but not always easy to execute. Negotiating finance isn’t comparable to negotiating anywhere else, and the tactics that work in business or the boardroom don’t typically work with lenders. As a high-net-worth individual, you will usually have space to negotiate, but that doesn’t mean playing hard ball necessarily translates to better rates. Instead, a softly-softly approach with lenders will usually yield much better results.
This is because every lender has their quirks, rules and what they want to see from you as a borrower. If you don’t meet their criteria or they feel there is undue pressure to take a deal (especially in high-value lending scenarios), even the best negotiator in the world won’t be able to talk a lender round.
Ultimately, most lenders are open to negotiation on price, but they often want something in return. A broker can help you identify what you have to offer in return for lower rates. Brokers can also assist with working out what the best deal looks like for you: sometimes, a slightly higher rate is more beneficial to you when it’s built into a package that serves your needs better in other ways. That might be no early repayment fees, an ability to borrow a bit more, borrowing for longer and so on.
How to approach negotiations
When it comes to negotiations, half the battle is to approach the party that will allow you room to create a package that meets all your needs in the first place. Negotiations are usually a possibility for high-net-worth individuals, but not every lender has the ability or desire to offer anything other than basic package deals.
Negotiating depends entirely on your situation, background, needs and the lender. It can be tempting to seek out finance from lenders your friends or peers have used if they were able to negotiate a good deal. However, you'll find that even the slightest difference in your background or situation can mean you won’t get a comparable offer, and you’ll get a much better deal with a completely different lender.
The possibility to negotiate also relies on successfully presenting that you can meet a lender’s requirements in the first place, opening the door for initial discussions. Providing more clarity on certain aspects of your case or presenting your application in a way that will appeal to a particular lender is usually well worth the time investment. A broker can handle this for you. Overall, working with a finance broker who understands the ins and outs of how to present your case and where the best lenders will be, is usually the difference between being able to negotiate and a hard "no."
Access the whole lender market through an independent broker
The "rise of the non-bank lender" is a big topic in the finance sector at the moment, and for good reason. Ten years ago, banks were generally the only option for lending, especially for anyone that wanted to borrow £1 million or more. Today, there’s a lot more choice, and banks are now competing with alternative and niche lenders as well as challenger banks.
As a prospective borrower, this is a good thing: if you are in a solid financial position, the competition in the market means it’s often easier to negotiate. Sometimes your profile can also open the door for more attractive deals as lenders – especially smaller players – look to bring on board what they regard as VIP clients (which typically includes high-net-worth individuals).
However, the sheer number of lenders means prospective borrowers need help to know who best to approach and how to access these institutions. A simple Google search or collecting a few names from friends won’t get you anywhere close to knowing who all the lenders are, what they do best and if they would be best suited to your scenario.
A broker like Enness, who has access to more than 500 lenders of all sizes and specialisations, can effectively shop the market for you, connecting you with the best lenders and negotiating on your behalf. This is especially useful given that you may be served better by very niche lenders who aren’t necessarily widely known.
Work backwards from your assets and your objectives
At the top of the market, no two borrowers are the same. A retired investment banker is likely to have very different assets and financing requirements than a tech entrepreneur or a career landlord. Yet most mainstream lenders will try and sell the same lending products to them. The result is many borrowers sourcing their own finance take a workable solution but not a "perfect fit" loan - a real shame when tailored and competitive packages so often exist with a different lender.
For this reason, Enness works backwards from your financing objectives and assets to find the lender and package that can cater to your situation in the most advantageous way rather than trying to fit you into a particular finance box. We will look at your assets – including where these are if they are outside of the UK – and work out which type of finance and which lender can best cater to these assets.
Enness’ offering
Enness brokers high-value international finance for UK resident and non-resident borrowers. However much you want to borrow and whether you are looking for a mortgage, portfolio finance, luxury asset finance, corporate finance or anything in between, Enness will be able to secure a competitive deal for you.
