FOLLOWING a year which saw the size of its loan book rise to over £100 million, Specialist Motor Finance says it plans to accelerate its growth this year.
The Chester-based firm has announced receipt of a new funding injection of £110 million for HP advances via its growing national network of finance brokers and dealers.
SMF’s focus will remain on what it sees as an expanding sector of car buyers who, despite showing evidence of affordability, are being isolated from mainstream borrowing.
They include, says the company, people completing previous loans who now discover that they are now no longer acceptable to some traditional lenders.
Tightened borrowing criteria combined with minor credit blemishes incurred during the term of the loan can mean that their credit profile has dipped below the required threshold.
Although broadly defined as “non-prime”, Managing Director David Challinor, said these and similarly placed people occupy a middle ground of credit impairment which is quite distinct from “high risk”.
Often, such borrowers can be accommodated within one of SMF’s 10 lending tiers where fixed APR rates vary from around 19% to 39% with no hidden fees or charges:
Challinor said: “Unlike those who suffer recurring repayment problems, customers in this segment are certainly not experiencing chronic financial difficulties.”
“On the contrary, our affordability checks often reveal comfortable earnings in secure employment, and other existing financial commitments which are far from onerous.
“These people’s circumstances don’t necessarily limit their options to solely budget-priced vehicles, but some are being handicapped by possibly minor credit glitches.
“We have developed a credit scoring system which meshes with a sophisticated method of calculating the true affordability profile of our applicants.
“It means we can often provide facilities to those declined elsewhere, and also demonstrate that we have achieved the best customer outcome for that individual.”
The company said it has invested heavily in automated technology which is helping it to meet the short underwriting timescales required by brokers for responding to would-be borrowers.