Good news for secured loans sector as Link Loans gets back to business
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DAVID JOHNSON, GOOD TIME TO GET INTO THE MARKET
The secured loans sector is starting to show signs of a recovery, with the resurrection of Link Loans.
In October 2009 the company’s sister firm - bridging lender Link Lending - was wound up but Link Loans continued to operate on a reduced scale.
The lender has since secured fresh equity funding from the Royal Bank of Scotland Special Opportunities Fund, managed by RBS Equity Finance.
David Johnson is back as chief executive officer, as are Philip George as managing director, Stel Charalambous as finance director and Maeve Ward as head of sales. Kam Sanghani, former managing director of White Label Loans, has joined as head of operations, and Stephen Johnson will continue as a non-executive director.
Link Loans will offer loans up to 75% LTV for the employed and 70% LTV for the self-employed, with rates from 11.9%. Loan amounts range from £5,000 to £30,000 and loan terms are from three to 20 years.
The products will be distributed via a panel of secured loan brokers.
Johnson says: “The market has never been better for a prime lender to enter, with a huge amount of unsatisfied demand.
“The old secured lending model relied too much on ancillary sales such as insurance. As a result it turned to increasing risk and reducing margins to drive volume.”
V Loans, Promise Solutions and WLM Money are some of the brokers offering Link Loans deals.
Dave Pinnington, business development director at V Loans, says: “Link Loans’ return, backed by a big bank, should provide fresh impetus to our market and help galvanise secured lending.” And Steve Walker, managing director of Positive Solutions, says: “This is a milestone. Link Loans’ move sends a clear message to other lenders that both confidence and opportunity are
returning to the secured loans market.”
Last week the Financial Services Authority pub-lished feedback on its plans to reform the payment protection insurance market and warned that a number of secured loan brokers and lenders may be forced to close if they cannot rely on selling PPI.
It estimates that the overall cost of dealing with PPI complaints to the secured loans sector could be £120m.
The FSA’s report states: “We expect a reduced volume of PPI sales and acknowledge that some secured lenders and second charge brokers may become insolvent.”
