finance
monthly
Personal Finance. Money. Investing.
Contribute
Premium
Awards

Investment loans, for example, would turn into profits in the near future while bad loans would result in recurring debts, bad credit score and higher interest rates. Car title loans are some of the popular personal loans sourced from private lenders as opposed to traditional sources such as banks and cooperatives.

More often, lenders financing, car title loans would need the applicants to undergo some credit check. While this is a crucial stage in any lending business, the procedure sometimes spoils the only chance an applicant had in order to acquire the so-much-needed money. In the tight economy, car owners who opt for the car title loan usually have a poor credit score with the other lenders and the only way to obtain a loan is to use their car title as security.

Over the years, car owners wishing to obtain a car loan, often don’t want to go through the credit check process since it can worsen their credit score. This has resulted in a friendlier way of obtaining loans without risking their credit reputation. Certain lenders give title loans with no credit check where car owners have to submit a few documents for consideration. Some of the most important aspects used by such lenders to evaluate the applicant’s ability to repay the loan are the presence of a steady income stream and the vehicle’s value.

Listed below are some tips that can help you decide, if you want to get a title loan or not.

Is it a good or bad idea?

This is a simple question with a straightforward answer. It depends on your urgency and of course the condition you’re in. Everyone at some point in time undergoes some financial emergencies such as paying hospital bills, overdue debts, etc. Taking a reasonable instant loan you can get is probably a good idea and a solution to such financial constraints.

A car title loan with no credit check will come in handy if you’re in need of some quick cash without ruining the already-damaged credit reputation. Since banks and cooperatives won’t buy your idea of borrowing a loan with poor credit, the only good idea is the no credit check car title loans. Again, going for a loan to fund some luxuries is a bad idea. Car title loans may come with slightly higher interest rates and you don’t want to pay such interest after funding some mediocre causes.

Requirements for the no credit check car title loans

When you’ve found a car title lender giving no credit check car title loans; you’ll be required to have certain documents with you. These are:

When no lending company would listen to your stories, the only way out of financial shortages is to use the resources you already have with you. Your vehicle is an important asset during such times and you can use it to your own advantage. Regardless of the existing credit score, the no credit check car title loans give you a chance to redeem your hopes without having to beg for what you deserve.

Here Alpa Bhakta, CEO of Butterfield Mortgages Limited, explains what factors and characteristics brokers and borrowers need to be on the look out for when selecting a lender. As part of the feature, she'll also delve into how the rise of challenger banks has affected the prime property and mortgage markets.

Between 2016 and 2018, as many as 4,214 new products were introduced into the residential mortgage market. It’s a remarkable statistic, and one that reflects the broadening range of options available to homebuyers.

Today, mortgage lenders have larger product portfolios, with subtle variations in their terms and rates meaning they provide multiple iterations of what is fundamentally the same offering. At the same time, the rise of “challenger banks” means there are more and more new players entering the industry, in turn giving borrowers entirely new companies to approach.

One would naturally assume this is a positive trend, something to be welcomed and celebrated. However, in truth, despite the increase in the number of mortgage products available to consumers and investors, challenges still remain.

As with any market that expands steadily over a long period, the wealth of options to choose from can prove overwhelming. Indeed, filtering through thousands of potential mortgages to find the best product from the right lender is perhaps more difficult than ever.

The value of intermediaries

Earlier this year, Butterfield Mortgages Limited carried out an interesting piece of research delving into the UK’s mortgage market––or more specifically, the UK’s high net-worth (HNW) mortgage market––to establish borrowers’ opinions of the products available.

The independent survey of more than 500 HNW individuals revealed that even for the wealthiest members of society, there are still significant barriers to securing a mortgage. For example, one in nine said they had been turned down for a mortgage in the past decade.

Furthermore, 79% said they think too many lenders are currently employing overly restrictive “tick box” methods when assessing mortgage applications; 60% believe it is becoming increasingly difficult to secure a mortgage for a non-primary residential purchase; and 67% of UK HNWs feel banks do not adequately cater to the needs of property investors and buy-to-let landlords.

The results illustrate how the wealth of options available to mortgage applicants is not always a good thing. In fact, it means there are more unsuitable products and lenders that a borrower must filter though.

Enter the intermediaries. Brokers and wealth advisers have a more important role than ever in guiding their clients, such as HNWs, towards the best and most appropriate mortgage products. Indeed, the aforementioned BML research showed how 73% of HNWs rely on brokers to help them find mortgages.

The larger the mortgage market becomes, the more valuable expert help will be in connecting borrowers to suitable lenders and products.

Choosing the right lender

It’s nearing three years since the EU referendum, and as if anyone needed reminding, Brexit has dominated political and economic discourse throughout this period. In a word, the result of the on-going Brexit saga has been uncertainty.

A lack of clarity regarding what the UK’s financial and political future will look like has resulted in hesitancy among consumers, investors and businesses alike. In the mortgage market, this means further due diligence is required from borrowers and brokers to ensure they work with lenders who are not at risk of succumbing to the challenging conditions currently gripping the market.

Over recent months the likes of Secure Trust Bank, Amicus Finance and Fleet Mortgages have withdrawn from the lending market or frozen their activities. As FT Adviser reported in January, the combination of Brexit and increased competition has forced some companies out of the market, while other lenders are pulling out of deals at the last minute.

One of a borrower’s greatest fears is that he or she will choose a mortgage lender who enters financial difficulties and this, in turn, has the potential to compromise their own finances. To avoid this, one must establish the relative security of different lenders based on the strength and longevity of their funding lines, as well as their past track-record of weathering turbulent periods, such as the 2008 global economic crisis.

The number of products and lenders in the mortgage market is on the rise. Meanwhile, Brexit uncertainty has presented new challenges to both traditional and challenger lenders. Consequently, selecting the right mortgage from the right provider requires more due diligence than ever.

After all, there are specialist lenders with expertise in providing bespoke mortgages for even the most niche borrowers in the most unique situations. Finding them may take work, but ultimately the health of the mortgage market reflects the ever-present demand among both domestic and international buyers for bricks and mortar assets here in the UK, and this certainly is something to celebrate.

The high cost credit industry hasn’t been rocked by the reported demise of payday lender Wonga, it is just mutating, says financial expert Jasmine Birtles.

Birtles, founder of MoneyMagpie.com, says that high cost credit is alive and well in the UK thanks to continuing lax rules on lending rates and the desperation of vulnerable families, many of whom have been hard hit by austerity cuts and the introduction of Universal Credit.

“One gets a sense of schadenfreude seeing Wonga brought down partly by claims management firms - firms which also often use questionable marketing tactics to get their customers and then charge over the odds for their service,”says Birtles. “However, even if Wonga does go into administration, it doesn’t by any means herald the end of high cost credit. There are many over-priced lenders on the market, and more waiting in the wings, to take up the slack.”

Birtles is calling for a two-pronged approach to dealing with the lending crisis in the UK:

  1. Put stricter caps on how much lenders can charge in interest on any loans. Even though Wonga was forced to reduce its interest rate from over 5,000%, it is still charging over 1,500% now which is an insane rate for anyone to pay
  2. Make more money available as a Social Fund loan. It used to be that people in dire straits could get a quick loan, at no interest, to buy essentials for their home through the Social Fund. Hardly anyone gets one of these now. If the money were made available again it would stop quite so many people going to high cost lenders when desperate.

What it means for Wonga customers

Sadly, if Wonga does go into administration it won’t mean that current customers will have their debts wiped out. The administrators will take over the running of the business and will demand money in the same way as the company would have done before - possibly even more vigorously

What it means for the industry

It sends a warning shot across the boughs for other high cost credit companies but it won’t stop them charging over the odds for short-term loans. In fact it may even encourage other companies to ramp up their offerings to fill the gap.

Already there are companies doing well out of high cost credit:

(Source: MoneyMagpie.com)

To hear about Nucleus’ asset based lending facility, Finance Monthly speaks to Corporate Sales Director Ian Bath, who joined the company in July last year and has been working on developing their mid-market ABL business since then.

 

What is the Nucleus approach when providing asset based lending (ABL) to companies?

At Nucleus, our approach always starts with getting a good understanding of the business we are dealing with, the people behind it, and what they are looking to achieve. With the benefit of this understanding we can start to tailor a package of facilities that not only covers the anticipated needs, but the inevitable bumps along the road that every business experiences as well.

The Nucleus ABL offering includes not only invoice finance, but extends to stock, plant and machinery, and property as well. We have no hard and fast rules around the mix of assets that comprise the borrowing base, and will often fund assets that others may exclude, making our solutions truly flexible.

A particular specialism within Nucleus is funding contractors who operate within the construction sector.

 

What are the advantages of asset based lending for companies?

Asset based lending frequently enables companies with a strong asset base to get more leverage out of their Balance Sheet than traditional senior debt can provide. It is particularly appropriate for businesses going through a period of change - when they need to invest in growth. Cases where EBITDA is still modest, but the outlook shows an improving trend would be a good example of this. In these situations, it is difficult for a senior debt provider to get comfortable with lending against next years’ income in the same way as a secured lender can. Additionally, ABL facilities typically have fewer covenants than traditional types of lending, making the availability and predictability of funding more stable in times of uncertainty - as we are experiencing at the moment.

 

Can you talk us through some of the recent trends that Nucleus has observed in the ABL space?

The number of players operating in the space has increased significantly in recent years. Whilst Nucleus has traditionally focused on SME businesses, we have seen an increasing demand in the Mid-Market, and increased our funding threshold to £50 million in 2017. This is a factor of the so-called Alternative Lenders focusing on smaller opportunities and the American Banks hunting out sizeable cross border deals. Increasingly ABL within the High Street banks is working in conjunction with their leveraged finance teams and the basis on which deals are structured is heavily influenced by them, rather than more traditional ABL values.

We have also seen ABL and Private Equity working much closer together as their understanding of our offering, and the value we can bring to a transaction, has improved.

 

What are Nucleus’ goals for the future of your ABL practice?

We are committed to continuing our support for businesses in a range of industries and sizes, with our flexible offering of products. In 2017, we doubled the total amount that we have lent to businesses to £700m and this year, our ABL product will continue to play a significant role in Nucleus’ growth plan over the next 12 months and beyond.

 

CASE STUDY:

Key Stats:

Type:  Invoice Finance

Borrowed: £8m

Industry: Manufacturing

 

EXPERT TOOLING AUTOMOTIVE LTD.

Expert Tooling Automotive Ltd. came to Nucleus because they needed to replace their existing ID facility whilst retaining the same pre-payment and funding limit.

 

Established in 1972, Expert Tooling Automation Ltd. is a highly respected supplier and manufacturer for the British automotive industry. Expert is the largest Automation System builder in the UK, supplying specialist assembly line components to clients including Jaguar Land Rover, Aston Martin and Nissan.

The business has gone from strength to strength in recent years, increasing turnover by five times in under seven years. Previously funded by a bank, they needed to replace their existing Invoice

Discounting facility when their provider pulled back funding. Although still retaining a solid balance sheet and order book, after several overseas contracts ran into difficulty. Expert were asked to seek alternatives.

After consulting their broker, Expert was recommended to several finance providers. The deal was complex, with a high concentration needed for one of the debtors and it required a specialist understanding of the industry to structure the facility appropriately and support the client’s operations. Nucleus was the only funder who were able to fully meet their requirements and was able to match the previous provision and deliver the bespoke £8m Invoice Discounting facility that Expert needed.

Nucleus team spends time getting to know all the businesses that the company funds and this client chose them because of the flexibility and the direct access to decision makers that they offer.

 

Angelo Luciano, CEO: “Nucleus took the time to understand our business and the challenges around the nature of our project related trading. Nucleus offered a flexible solution that allows us to have other sources of funding where appropriate.”

Chirag Shah, CEO, Nucleus: “It’s personally rewarding to support businesses that represent the heartland of the British manufacturing and construction industry, a profitable sector that contributes to job creation and driving the UK economy.”

 

Contact details:

Email: contact@nucleus-cf.co.uk

Website: https://nucleuscommercialfinance.com/

For Finance Monthly, Nic Beishon, Head of Commercial at Equifax, the consumer and business insights expert, below comments on the new Standards of Lending Practice for small businesses, which came into effect last week, 1st July 2017.

As major contributors to the ongoing success of the UK economy, SMEs will benefit from the new Standards of Lending Practice. The standards will drive good practice for lenders when assessing different types of business, protecting those borrowing money and delivering fair customer outcomes. Evaluating a borrower’s capacity to meet their ongoing repayments is increasingly important to safeguard them against over indebtedness, and to identify businesses at risk of falling into financial distress.

The standards now apply not just to the very smallest business, but to any business with a turnover of up to £6.5 million. In order to meet their responsibilities to both clients and regulators, lenders need a 360-degree view of the applicant to understand their financial health. They should not just look at the businesses financials, but also the individuals behind the business. In particular, lenders should consider information such as the business current account turnover data and the use of overdrafts to assess whether, for example, a loan is appropriate. This should be the case no matter the size of the SME, whether the person being dealt with is a sole trader or a director of a company.

This information is not just important at the time of application, it should also be assessed on an ongoing basis to identify any change in circumstances, and in the case of financial difficulty, the best way to assist the business owner.

The SME sector is vital to the UK’s continued economic recovery and the standards are designed to create fairer lending for these important businesses. Integrating a mix of commercial and consumer analysis into lending decisions will allow lenders to commit to responsible loans while helping the sector to grow.

About Finance Monthly

Universal Media logo
Finance Monthly is a comprehensive website tailored for individuals seeking insights into the world of consumer finance and money management. It offers news, commentary, and in-depth analysis on topics crucial to personal financial management and decision-making. Whether you're interested in budgeting, investing, or understanding market trends, Finance Monthly provides valuable information to help you navigate the financial aspects of everyday life.
© 2024 Finance Monthly - All Rights Reserved.
News Illustration

Get our free weekly FM email

Subscribe to Finance Monthly and Get the Latest Finance News, Opinion and Insight Direct to you every week.
chevron-right-circle linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram