Last May the Financial Services Authority (FSA) made an adjustment on the penalties associated with secured loans amounting to £25,000, which resulted in a welcome boom in the UK secured loans market. A year on however, many companies operating in the industry face the possibility of a slow-down in the time taken to complete unregulated loans, as various regulatory bodies discuss the possibility of introducing regulation for loans above 25,000, thereby affecting the speed at which loans can be processed. Introducing this change will effectively benefit the consumer with enhanced rights of cancellation, but at what risk to those operating in the secured loans market?
Differentiation
In order to compete effectively among an increasingly saturated market, companies looking to differentiate themselves from their competitors will need to work arduously in 2006 to offer more value to their clients. One company that is taking active steps to help progress the business is Cardiff-based secured loans company, Prestige Acceptance.
The company was launched in Sept 2003 by Darren Fry, a sole trader who started his career in the finance industry aged 16 via a Youth Training Programme. After working for a series of companies over the space of 10 years, including Forthright Finance and Online Finance, he saw the potential to launch his own business, as he possessed first-hand experience of undertaking several roles within the finance industry, thereby aiding him in defining best practice methods at all levels.
Fry set about gaining the necessary trading licences and by early 2004 he was operating as a sole trader from his back bedroom, with just one lender onboard. By the end of 2004, Fry had forged links with many other lenders and had moved into Cardiff-based offices early 2005.
The second trading year proved immensely successful as the business provided lenders with approximately £3.5 million of written business, excluding payment protection insurance (PPI) premiums and fee charges. Fry aims to develop the business further, estimating a four-fold increase in 2006.
His personal experience of working in the industry, and that of his staff, is one of the company’s greatest assets. Over the last three years, his team of highly experienced and senior level staff have established sound working relationships with brokers in the market and secured links with a number of lenders across the UK.
A unique approach
By taking a unique approach in paying commission to the brokers, Fry is confident that he will be able to beat competitors, and more importantly provide first rate service to the customer. The company’s approach to the mortgage intermediary market is simple – we allow the mortgage broker to negotiate his/her commission on the first case to complete with us, on the day of completion with the lender we transfer the commission immediately via internet banking. This will not only allow the mortgage broker to earn a higher level of commission but will also provide them with a faster rate of service compared with their competitors.
Although larger companies represent a major proportion of those operating in the UK market, Prestige Acceptance is more than a match for its competitors while also offering a personal approach to servicing its clients.
The staff at Prestige Acceptance aim to find the best rate loan for their client each time. Although there is a flat fee for underwriting, the fee is quoted on an individual basis rather than a standard charge. As well as searching for competitive rates, Prestige Acceptance pays commissions to the mortgage intermediary even before they receive the commission from the lender, which reflects their commitment to offering a top rate service.
