The secured loan market is not only growing in terms of business volume but also in average loan size as more intermediaries turn to the sector because of lack of appetite for capital raising remortgages in the first charge market, according to V Loans.
The secured loans packager has reported that its average loan size has doubled during 2012 to around £41,000 and the reasons for loans from brokers are much more diverse than in the past.
“Brokers are coming to us with enquiries for business purposes, investment property purchase as well as debt consolidation and home improvements,” said Dave Pinnington, business development director at V Loans.
“As the first charge market has retreated from lending, so secured loan lenders have stepped up to fill the gap. With Shawbrook increasing their loan size to £200,000, Blemain are now also offering larger loans up to £250,000 or up to £500,000 upon referral and Masthaven and Nemo are offering loans up to £100,000.
“This activity is feeding through to the intermediary, who faced with not being able to use remortgaging as freely as in the past, is seeing the advantages of the secured loan as an effective way to maintain existing borrowing at preferential terms and provide the means to borrow the extra funds clients need.”
We have done a loan for cosmetic surgery in the past. As the applicant was an air hostess, we couldn't quite decide if it was "business purposes" or not!