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Endeavour and Swift issue updates
The fall-out from the ongoing squeeze in the loans marketplace is rippling through UK loan providers, with updates on loan deals appearing daily.
Two more loan providers, Endeavour Personal Finance, owned by HSBC, and Swift Advances both released updates to their lending packages this week.
The updates contained the expected tightening of loan to value levels and approval criteria, but they also included additional fees to some products and a reduction of broker commissions.
Within the industry, the issue of reducing broker commissions is becomng hard to swallow, with several lenders announcing cuts in commissions at relatively short notice, giving brokers little time to react and adjust their financial plans.
Loan brokers base their staffing costs and advertising spend on predicted revenues from loans arranged. If their earnings from these loans is sigificantly reduced, and some of these cuts are significant, then there's a likelihood that marketing plans will not be viable.
It's a lose - lose situation all round as the customer is offered fewer choices and higher rates, brokers earn less per deal and may even face losses or closure, and the lenders squeezing brokers the hardest will damage established relationships and drive away business. There's a lot changing in the loans business currently and the winners and losers are yet to be identified.
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