Freedom Finance reported a record month in June 2013, brokering £10.7m worth of unsecured and secured loans.
Freedom Finance’s year-end results for financial year 2013 also revealed a 40% increase in profits compared to the previous year.
Loan Introducer speaks to its managing director, Nicola Georgiou, about why she thinks the business is seeing increasing demand and where she sees the secured loan market heading in the next 12 months.
Q, Freedom Finance had a record month in June – why do you think you are seeing an increase in business?
A, We have been investing in marketing our proposition, which allows customers to shop for a loan and get accurate quotes for both unsecured and secured loans before committing to buy. As we do this using a ‘soft quotation search’ customers can look at what a lender can offer them without affecting their credit rating – traditional comparison sites only show headline rates – not actual quotes based on borrowers’ credit profiles. This, combined with publicity in both national and trade press has driven new customers to our proposition.
Q, Has the demographic of your typical customer changed in recent years?
A, The financial crisis has meant that we are looking after more customers who would have previously been given a loan by a high street lender or bank. We are seeing more prime customers who are no longer able to get credit with the leading rate lenders due to the tightening of their criteria. We are also seeing a lot of self-employed customers needing specialist lending.
Q, Do you have concerns about the impending regulation from the Financial Conduct Authority?
A, From our perspective, this regulation can’t come soon enough; it will mean that loans – secured loans in particular – will become a much more accessible product. As a business we have already adopted many of the principles that we believe will be set out by the FCA. I look forward to the upcoming consultations with the FCA where I hope we can gain further visibility on what we can expect from the coming regulation and I am confident that as a business our culture is one that can easily adapt to the requirements of working in a regulated environment.
Q, What do you think are some of the challenges facing the secured loan sector?
A, In order to make the most of the opportunity that the new regulation will bring, the secured loans industry needs to ensure its processes and customer journey are efficient and customer friendly. The current process is admin heavy and this could be much improved with better use of technology.
Q, Where do you see the secured loan sector in five years’ time?
A, There are some challenging times ahead as we adapt to the regulatory environment but I think that there will be a steady growth, with new lenders entering the market. I think we will see secured loans becoming a mainstream product to be considered alongside re-mortgages. I welcome the idea of steady growth alongside responsible lending and competition amongst lenders and brokers, but do not anticipate any dramatic changes.
Q, In an ideal world, what products would you like to see in the secured loan market?
A, I would like lenders to work on their processes and, as mentioned, technology is key here. I don’t think there are any great strides to be made with LTV, and even if there were, we would take our own view as a broker on what we regard as responsible lending. Lenders are competing in the same space so they will need to work on their added value proposition to win business.
Q, What do you enjoy doing when you are not at work?
A, I am a huge Manchester United fan so I try and get to the matches when I can. I also like to bake and have just treated myself to a KitchenAid so I can be a little more Nigella – although it probably needs to come out the box first.
Q, If you were stuck on a desert island, which three people would you like to be stranded with and why?
Bear Grylls – so we could survive;
My husband – so we could turn it into a child free holiday;
Atul Kochhar – a superb chef who can do creative dishes with fish and coconuts.
Q, What one item could you not live without and why?
A, My iPad. I have to travel quite a lot on business and it means I can still see my family using Facetime.