Secured Loan Brokers have disputed Moneyfacts’ claim that there were only three lenders active in the second charge / secured loan market.

As reported by Best Advice - Michelle Slade, analyst at Moneyfacts.co.uk, said that Nemo Personal Loans, Ocean Money and Secure Trust Bank are the only remaining lenders active in the second charge / secured loan market.

However, brokers have been queuing up to tell Best Advice how wrong Moneyfacts were with their ‘facts’.

Martin Mullady, director of Scottish secured loan broker Network Loans, said his firm currently had access to second charge products from Nemo, Blemain, Prestige, Link Lending, First European (FES), RBS and Black Horse Finance.

He added: “In addition there is still an option to place business with GE via one of their retained brokers and there are a number of lenders who are also lending however we have chosen not to have agencies as they would only duplicate the facilities we currently have with our lenders.

“Only FES would appear to have had funding issues but these were resolved recently and this will see them return to business as normal in the next couple of weeks. Nemo and Link continue to offer us an excellent service and in our conversations with all of our lenders they have re-iterated that they will continue to lend.”

He said this was completely at odds with Slade’s comment that “…Many lenders have found it is no longer a viable business option to offer secured loans in the current economic climate and we have to wonder for how long the remaining lenders will be able to survive."

Mullady said: “Michelle’s idea of a “typical” secured loan customer is also a bit wide of the mark. Our experience is that we are seeing customers looking to release equity from their property for a number of reasons. Usually this is debt consolidation but the customers find that they are either tied in to a deal with their current first mortgage lender which would cost to come out of, or they are enjoying the current low base rate and want to continue enjoying this for as long as they can and are therefore happy to use a secured loan as a stop gap which will allow them to do what the want to do right now, and as and when their mortgage rates begin to rise they will review the situation.

“The idea that the typical secured loan applicant is a ‘sub-prime’ customer is out of date. As has been seen in the first mortgage market, those customers with a poor credit history are finding loans hard to come by. Most of the above lenders have facilities for customer who were traditionally seen as “sub prime” however the lower loan to values are a reflection on the risk that these lenders are taking on. In short it may have been the case 18 – 24 months ago that the Michelle was seeing more sub prime business but the profile of our secured loan customer has changed over the period and we are seeing what would have been termed ‘prime’ customers making use of our facilities.”

Paul Ford, commercial director at Fluent Money, told Bestadvice.net that Moneyfacts were also wrong to suggest Ocean and Secured Trust Bank were available to brokers.

He said: “It’s not as bad as this, and two of them are direct so I don’t have access to them.

“Whilst the industry is certainly constricted, it’s not over by any respect. Demand is huge. Supply is much more difficult to come by of course. But it’s certainly not all doom and gloom.”

Chris Fairfax of Positive Lending (UK) Limited said: “Whilst it is generally accepted that the UK loans market has significantly reduced both in terms of lending volumes and suppliers, specialist lenders are still active. We are aware of seven lenders in the UK intermediary market today. The key for any introducer is to source the correct packager that has unlimited access to every available lender thus maximising conversion and ensuring TCF.”

Posted 20/05/2009 18:29:51