Cattles' woes drag two firms down
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The secured loan brokerages have been forced to close after being hit hard by Cattles' decision to cease new lending through its subsidiary Welcome Finance in January.
The closures resulted in 1st Stop Group shedding 120 jobs and Magic Loans 20.
1st Stop Group's mortgage broking firm, 1st Stop Mortgages, along with its debt management business Adcroft Hilton and its lender arm 1st Stop Financial Services, are still trading.
Paul Lefevre, director at master broker Happy Loans, is owed money by 1st Stop Finance.
He says: "It's shocking that the group is allowed to continue operating other businesses when 1st Stop Finance has not paid some brokers the commission it owes them.
"I have always taken pride in my reputation but now I have to explain to my brokers why they are not gett-ing paid."
Alex Mollart, joint managing director at 1st Stop Group, says: "The majority of brokers have been paid their commissions but some are still outstanding."
Angelo Trapasso, director of Magic Loans, says it left the market with money in the bank.
He says: "Welcome stopping lending was the killer for us. This, along with Paragon Personal Finance cutting its lending and mounting payment protection insurance claims, meant we could no longer continue trading."
Cattles issued a second profit warning last week and suspended three directors after auditors dis-covered accounting errors.
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