For lenders, the biggest threat in property finance is not borrower demand or fluctuating interest rates. It is default. A loan that is not repaid on time ties up capital, damages balance sheets, and triggers costly enforcement. As explored in The Cost of a Failed Exit, defaults erode profitability and damage reputation. In 2025, when markets are volatile and refinancing criteria are more stringent than ever, lenders cannot afford complacency.
Yet default risk is rarely about borrowers’ intent. Most developers and investors want to repay their facilities. The problem is almost always poor exit planning: overoptimistic valuations, underestimated timelines, or assumptions about refinancing that never materialise. These issues are predictable, and in many cases preventable — provided the lender has the right partner at the table.
That partner is the broker.
When loans are arranged directly between lender and borrower, critical details can be missed. Borrowers may present GDV assumptions that are too optimistic, sales strategies that are unrealistic, or refinance plans that rely on income lenders will not accept. Without independent testing, lenders may only discover the weakness when maturity looms.
In Navigating Valuation Gaps, we explored how down-valuations can sink repayment plans. In Common Exit Pitfalls for Property Developers, we saw how overconfidence and liquidity gaps trip up even experienced developers. These are precisely the risks brokers can identify early — before a loan is ever approved.
Brokers are not just intermediaries. In 2025, they function as lenders’ first line of defence against repayment failure. Their role can be broken down into three crucial areas:
1. Stress-Testing Exit Assumptions
A skilled broker will not take a borrower’s exit plan at face value. They will test it against live lender criteria, real-world sales data, and conservative timelines. If a developer claims they will refinance onto a buy-to-let facility, the broker will apply stress tests as lenders do today, not as they did two years ago. If those numbers do not work, the broker will redesign the strategy before it ever reaches the lender’s desk.
2. Structuring Contingencies
As we highlighted in Why Every Bridging Loan Needs a Clear Exit Strategy, no facility should ever rely on a single exit. Brokers build contingency plans — part-sales, alternative refinance options, or staged disposals — that reassure lenders the loan will be repaid even if the primary exit falters.
3. Aligning Borrower and Lender Expectations
Many defaults arise because borrowers and lenders are not aligned. Borrowers expect generous GDV assumptions; lenders expect conservative ones. Brokers bridge this gap by setting realistic expectations, ensuring the borrower understands what the lender will and will not accept. This alignment prevents the disappointment and disputes that so often lead to default.
In 2023, a regional lender was approached directly by a developer seeking a £4 million facility. The borrower’s exit relied on refinancing onto a portfolio buy-to-let mortgage. The lender was prepared to proceed but requested broker input for structuring.
Willow stress-tested the refinance plan and discovered that under current stress tests, the rental yield was insufficient. Without adjustment, the refinance would have failed, and the borrower would have defaulted. Instead, Willow restructured the deal, arranging partial unit sales alongside a smaller refinance. The facility repaid on time, the lender avoided default, and the borrower preserved credibility.
This outcome illustrates why lenders benefit directly from broker partnerships: risks are identified early, exits are credible, and capital is repaid on time.
The property finance landscape of 2025 is more complex than at any point in the last decade.
Without brokers, lenders must assess these risks alone. With brokers, they benefit from specialist expertise, live market knowledge, and relationships with alternative lenders who can provide Plan B exits.
As seen in Exits for Borrowers with Complex Income or Overseas Status, some borrowers’ profiles are simply too complex for lenders to assess in isolation. Broker involvement ensures the facility is not just fundable at inception, but repayable at maturity.
For lenders, the implications go beyond individual deals. Default risk affects loan book performance — the metric on which funders, investors, and regulators assess credibility.
A loan book characterised by late repayments, default interest, and enforcement actions is a weak loan book, regardless of headline interest margins. By contrast, a portfolio of loans that consistently repay on time is attractive to institutional investors, supports future fundraising, and enhances the lender’s reputation.
Broker partnerships directly support this performance. By filtering out weak deals, strengthening exit plans, and ensuring realistic structuring, brokers reduce the proportion of loans that fall into distress. For lenders seeking to grow sustainably in 2025, this is not optional — it is essential.
A private bank approached Willow in 2024 with a proposed £10 million facility for an international borrower. On the surface, the deal looked strong. But the exit relied on refinancing through another institution that had little appetite for overseas income. Without intervention, the borrower would almost certainly have defaulted, and the bank’s reputation would have suffered.
Willow restructured the facility, introducing an alternative exit via part-sales and a secondary lender with appetite for foreign income. The borrower repaid on time, the bank preserved its reputation, and its credit committee gained confidence in future complex transactions.
This is the intangible benefit of broker partnerships: protection not only of capital, but of reputation.
In practice, many lenders already benefit from brokers. But in 2025, the most successful institutions will formalise these relationships. That means:
By treating brokers as part of the default-prevention strategy, lenders move from reactive to proactive risk management.
At Willow Private Finance, we do not see ourselves as simply introducing borrowers. We act as structuring partners, aligning borrower goals with lender requirements to create exits that work in the real world.
In one case, we partnered with a challenger bank concerned about refinance risk on a high-value central London scheme. By stress-testing the borrower’s plan, we identified potential shortfalls, restructured the facility, and arranged fallback options.
The result was a facility the bank was confident in, with default risk materially reduced.
For lenders, this kind of partnership is not just about one deal. It builds a loan book where repayment is the norm, not the exception — and where investors, regulators, and borrowers alike view the institution as credible and trustworthy.
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About the Author — Wesley Ranger
Wesley Ranger is the Founder and Director of Willow Private Finance. Having worked with both borrowers and lenders for over 20 years, he understands why defaults happen — and how to prevent them.
Wesley specialises in structuring deals that satisfy lender concerns and designing broker partnerships that directly reduce default risk and strengthen loan book performance.
Important Notice
This article is for information purposes only and does not constitute financial advice. Property finance carries risk, including the risk of default or repossession if loans are not repaid. Exit strategies should be assessed carefully and tailored to individual circumstances. Always seek professional advice before entering into any finance agreement. Willow Private Finance is directly authorised and regulated by the Financial Conduct Authority (FRN: 588422).
