New warning over untrustworthy broker loans
Licensees looking for finance should never pay any money up-front to a broker unless they have a letter detailing the offer of their loan, according to a leading finance company working with pub tenants.
Chris Heard, director of finance company Marlborough Leisure, says that while all brokers need to have some financial commitment from a client to ensure a level of security, licensees should never pay money up-front to companies unless they have a guaranteed offer in writing.
He was responding to recent stories published by The Publican which revealed that licensees were being left out of pocket by rogue recruitment companies whose promised loans fail to materialise. Licensees contacted The Publican claiming they had been promised a mortgage, paid an administration fee of £350 and had not received the deal they were promised.
The rogue brokers refuse to provide the loan details, claiming the client will simply be able to go directly to the bank and they will lose their fee.
Mr Heard believes this is bad practice as reputable brokers who have a good relationship with banks and send them a large amount of business are often able to get preferable rates.
He has slammed these rogue companies that ask for the administration expenses up-front and then demand money for a valuation before an offer is given.
He says any reputable company will advise you if you need a valuation for the property up-front. A client should see a copy of the loan offer from the bank with the conditions attached, including whether a valuation is required.
"No purchaser should pay for a valuation until they have a loan offer from a bank," he argued. "Whatever deal you put to these brokers they'll say they can do it."
