The secured loans industry has seen the demise of yet anther secured loan lender as Link Loans announced it’s closure a few days ago.This is the most recent in a series of secured loan lenders who have suffered a similar fate.
Only days prior to this, the secured loans industry in general felt that Link Loans was bound to be in a precarious situation as their parent company Link Lending had gone into administation due to the refusal of the Bank to continue funding them.
Nobody could really understand how Link Loans could expect to be funded when Barclays refused to fund their parent company and had forced them into administaion. It looked right away that Link Loans were also almost certain to fall.
Link Loans have not been established long, and they had an unusual way of working unlike any other secured loan lender. Link Loans dealt in the intermediary market, that is through secured loan brokers.
Secured loan brokers, with their extensive understanding of each individual secured loan lender’s criteria know which lender is most suitable for each individual customer’s requirements. This means that before forwarding a secured loan application to any given secured loan lender the broker knows that the application for a secured loan will be acceptable and that his customer will be granted the secured loan funds, as long as all information supplied by the applicant is true.
Link Loans did have underwriting criteria which they supplied to brokers, but after that the way they were required to work was different from that of other secured loan lenders.
With Link Loans this was not the case. A secured loan broker had to first of all do a credit check, and also had to approach the land registry to do a land search of the customer’s property. This then had to be faxed or emailed to Link Loans who then had to approach their funders to seek approval for the secured loan.
When Link Loans heard back from their funders, the secured loan broker was told if their application for a secured loan was acceptable or not.
Other secured loan lenders did not appear to need the authority of the bank granting them the funding.
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