The wealthy struggle to acquire credit
It seems even some of the most wealth people can struggle to qualify for credit. Market Financial Solutions (MFS) has revealed that since 2011, more than a million of Britain’s wealthiest individuals have been turned down for credit.
So, what would qualify you as a wealth individual?
A recent survey set the criteria as a UK adult with over £250,000 worth of investments. These are people trying to raise funds for more buy-to-let investments, who the banks now classify as high-risk.
Amazingly the research also uncovered that 15 per cent of investors have been unsuccessful in an application for credit, despite owning assets that exceed the size of the requested loan. 31 per cent of people who completed the survey stated the current credit lending process is too restricted by red tape and bureaucracy.
Then how do people continue to raise funds?
High net worth individuals refused credit from the high-street banks are turning to independent financial adviser, brokers or specialist finance providers to back their projects, as much of the regulations imposed following the financial crash don’t have any real baring on their lending decisions. 25 per cent said they have used alternative finance and found it easier and quicker than going to mainstream or traditional lenders.
It seems whilst the major lenders continue to live life under the magnifying glass, more and more investors will have to look to alternative lenders to back their ambitions.