Rip-off loans (less than 6 repayments made)

Technically, it is downgraded, not defaulted. Downgrades do not necessarily lead to defaults.

Oh, no, no, no! Those builders had no inkling, when they took out the loan, that they might be talking about liquidation to FC after just two payments. If there were such foreseeable problems in the near future, then they would have told FC what might happen and FC would have told the lenders in a note, wouldn't they?

If, hypothetically, a prospective borrower told FC about some large contingent liability, then FC would either reject the application or tell the bidders about it, wouldn't they? Surely they would not just accept the loan at a lower risk band and present the good historical figures - that would be misleading.

Another one #26991. £149,200 over 60 months. Two months later and the Coventry garage goes bust owing £608,170.78.



It looks to me, with the benefit of hindsight, that the business had failed well before taking out the FC loan.

Again you are probably right.  But what's your point, that some small businesses will apply for loans when the directors already know they will almost certainly fail?

That's lending to small businesses for you.  Lessons to be learnt for FC on due diligience, probably, but that doesn't mean you will never get such loans.

For me, I long ago added anybody who buys and sells cars on my list of 'don't go there', really it's getting a long list!  

My only point would be to say that I hope FC persues such cases with fervour.  If you don't you get seen as a sucker.  I have no idea in this case, but often such defaults are accompanied with some dodgy passing through of the money, so that it either pays off director loans or more usually finds it way to their 'partner', before the person declares bankruptcy.

I wonder if they sniggered a bit when hearing about the upgrade to A+.

FC Account Manager     "Good news! Not only can we provide the replacement loan but your grading has gone up from C to A+. Your repayments will be considerably reduced."

Borrower                     "Thank you, they certainly will."

From the FC detailed comment it seems that they are responding to concerns and letting lenders know that they will be going after those suspected of being bad dudes, early folders.

I would not know. I think they chase hard the ones where they think they can get hold of substantial recoveries, and those where the borrower is suspected of being a bad dude. They expect more E failures than A+, but I think any difference on chasing by band is probably influenced by the overall loss rate of that band compared with target. They no longer report by band on the statistics page, and so a veil has been drawn over that - particularly any possible large A+ or A property default which might occur (maybe the one which is currently £1.6M later than 300 days). We're going to need a bigger fan, as the saying goes, sorry no image!