May 5, 2025

Why Lending Criteria Matters – And What Brokers Need to Know

Paul Jordan, Credit Risk Manager at YBS Commercial Mortgages, discusses the importance of understanding what lenders look for in a case, and why brokers should be knowledgeable on criteria.

What Lending Criteria Really Means

As a Credit Risk Manager, working with lending criteria is my bread and butter. But what does ‘criteria’ really mean to lenders, and why do we believe it’s so important for brokers to have a thorough understanding of it?

Put simply, ‘criteria’ outlines a lender’s risk appetite, acting as both an external guide and an internal checklist. It helps lending teams assess whether a deal fits within the lender’s appetite and work out whether it’s possible for them to progress it, based on the details provided.

However, lending isn’t black and white, and lenders recognise each case is unique, requiring a balanced approach. Given today’s challenging market, more and more cases sit in a ‘grey area’, making flexibility even more important.

Why It Matters and the Role of Lenders

Clear criteria helps lenders support the right deals and manage risk effectively, ensuring loans are likely to be repaid as well as having appropriately skilled people to handle the kinds of cases they are committing to taking.

Unlike the residential market, commercial lending lacks third-party sites or sourcing systems to consolidate this information. Communication is key. By providing clear, accurate and timely updates.

Lenders must take responsibility for ensuring their criteria is clear and accessible. A lender’s goal is to filter initial enquiries to those they can support, and upfront clarity makes this easier.

Trust Is Important, Information Is Key

Brokers naturally prefer lenders who are reliable, responsive, and easy to work with. Providing a swift ‘no’ when a deal isn’t viable allows brokers to move on quickly, avoiding delays. At YBS Commercial, we use internal ‘deal forums’ to assess cases early, helping brokers get faster answers.

Brokers also play a crucial role by gathering key information from their clients upfront.

Lenders must take responsibility for ensuring their criteria is clear and accessible. A lender’s goal is to filter initial enquiries to those they can support, and upfront clarity makes this easier.

The Future

As the industry evolves, better data availability and technological advancements will enable greater automation around elements of the lending process. As a business though, we recognise the importance of the human touch, and that technology should complement, not replace this.

About YBS Commercial Mortgages

YBS Commercial Mortgages provide an award-winning commercial mortgage service with the security of being part of Yorkshire Building Society. We pride ourselves on delivering a dedicated personal service with a flexible hands-on approach to lending.

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About Fiducia Commercial Network

Fiducia Commercial Network is a commercial finance ‘Appointed Representative’ network created to allow independent firms to provide commercial property finance and trading business finance options to their existing client base and network.

Joining the network provides opportunities for professional brokers to offer a full range of commercial finance solutions by acting as an Appointed Representative (AR) with the full support of the Fiducia Commercial Network team.

The Fiducia Commercial Network membership includes FCA authorisation and reporting, PI insurance, and NACFB membership, plus business, compliance, finance, system, and admin support from a company with over 20 years’ experience in commercial finance.

If you’d like to discuss joining Fiducia Commercial Network or you’d like to apply to become an Appointed Representative…

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