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Mixed Fortunes in Loans

The past few months have seen an unprecented period of change in the loans marketplace and none other than the niche secured loans sector. The testing period in consumer credit has seen many firms struggle to adapt to the changes and several have had to scale down or shut up shop completely. At the same time some experienced firms have used the opportunity to make timely changes, move with the changing marketplace and emerge as stronger loans companies as competition falters.

This week brought the typical mix of differing fortunes. Successful lender Paragon announced a 15% cut in it's loans workforce with almost 100 staff facing redundancy and Access Broker Services, which had operated in the secured loans market since 1988, has gone into liquidation. They employed 80 staff and were still advertising 125% LTV loans on their website on the day they closed down.

On the positive side, there are some loan providers who are not in denial about the state of their marketplace and have moved quickly to adjust to the new operating environment.

Good examples of these companies are Link Lending, a Hertfodshire based business, also with 20 years experience. Link has recently launched a new secured loan product arm to complement it's bridging loan and short term finance offerings. Freedom Finance, one of the most recognised brands in the UK loans marketplace, has had to cut some staff in recent months but looks to be adapting to the changing loans sector and has recently been appointed by Virgin Money to broker secured loans to it's customers.

The terms of the Fredom/Virgin partnership are not available, but we suspect Virgin was able to drive a hard bargain given the difficulties Freedom was experiencing at the time.

In a similar deal, secured loans will be offered by Goldfish using the services of Relax Finance as the broker. The Goldfish brand has undergone a number of changes in recent years and is currently a part of Discover Financial Services, a leading credit card provider in the US.

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