c2-financial says a number of packagers and brokers are on the verge of insolvency because of a downturn in business volumes and tighter margins.The packager has been monitoring returns submitted to Companies House as part of its acquisition plans and warns that many businesses are suffering in the present climate of eroded margins as they haven’t adapted to a slimline world. David Wylie, group chairman of c2-financial, says: “Our business model has allowed us to build up a significant capital balance and we see acquisitions of other packagers and brokerages as a way to accelerate our growth in terms of distribution and profitability. “We have been watching the financial performance of competitors and it is evident that a number of substantial packagers and brokerages are experiencing significant downturns in business volume and profitability. It appears that certain businesses are on the verge of insolvency.” He adds: “Some firms’ management structures aren’t ensuring the business is run efficiently. These companies are being run as small businesses and management teams are making the wrong financial decisions. We believe they will be looking for an exit to avoid calamity.” C2-financial says it will continue to seek suitable companies to acquire. It has experienced sustained significant growth over the past three years and last year posted profits of over £1m. It has made no secret of the fact that it has an ambition to become the largest packager in the UK and its strategy is to expand its distribution to achieve this aim. C2-financial recently launched a sub-prime fixed rate cashback mortgage with free valuation and no application fee. The two-year fixed rate, which is funded by Southern Pacific Mortgage Limited, is fixed at 6.04% until December 1 2008 and has a maximum LTV of 65%. It features a 0.75% client cashback on completion and is available exclusively from c2-financial. Extensive County Court judgements and adverse history are allowed with the product. There is an early repayment charge of 6% for the first two years but there is no higher lending charge. The proc fee is 1.25% and there is an arrangement fee of £795.