Paul Munford, chief executive of Omni, said the lender would submit an application to the FSA “when the funding position of the business moves forward”.
Omni is currently in talks with four potential funders including a hedge fund, sovereign wealth fund and banks. The lender, which launched in November last year, has an existing open ended £50 million funding line from Christian Candy’s private equity firm CPC Group
Munford said: “We will apply to be regulated once our funding model has moved forward.
“We could be regulated now – I run a regulated business in Mortgage Centre IFA, it’s not an issue. But we don’t particularly want to lend on main residential transactions. We’re an investment lender offering finance to people who are taking advantage of investment opportunities.”
Munford added that he expected Omni would be regulated by the end of 2012 when second charge lending is due to come under the FSA and he said Omni was also considering extending lending terms up to three years and five years on the buy-to-let side.
He said: “The recession taught me to be cautious. The longer term products are intended to give peace of mind to borrowers who want to factor in the flexibility of a bit more time to find an exit and not be forced into selling. The 24 month deals are really 12 month deals with a backstop if it’s needed.”
Danny Waters, chief executive of bridging broker Enterprise Finance, said: "Transacting regulated business is a natural progression for any lender that wishes to make an impact and grow volumes in the short-term lending space.
“With the imminent changes to the regulatory environment I believe it is a prudent approach which demonstrates a real commitment to the market. This coupled with their plans to originate longer term loans will be well received by intermediaries and borrowers alike."
And Lucy Barrett, director of W&B Mortgage Solutions, added: “Although not all lenders are embracing regulation just yet, it's clear that this will have to change if they want to continue offering certain products which will come under the scope of FSA regulation.
“It’s very encouraging to see new lenders driving product innovation and an increase in medium-term products coming to market is just what the industry needs.”
Robert Sinclair, director of the Association of Mortgage Intermediaries, said: “The gradual process of lending groups looking to expand their areas of operation provides support to the view that market conditions are improving albeit slowly.
“It is good to see a firm with a clear plan and a view on how it wants to develop. Gaining the appropriate permissions is never easy and having a sensible view of timelines adds credibility to the proposal.
“In extending the terms of loans under very defined criteria, clearly Omni will be trying to avoid being caught offering regulated facilities without the appropriate permissions.”
