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Post by goldservice on Jun 24, 2014 16:59:21 GMT
At the risk of showing how green I am, the partnership announced today between FC and Santander looks like good news for lenders. If there are more borrowers seeking loans through FC, then rates might go up. Am I missing something?
It occurs to me that FC may be sending a differently worded epistle to its borrowers, and that the differences may be revealing. Does anyone have access to what the borrowers receive?
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dorset
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Post by dorset on Jun 24, 2014 17:10:32 GMT
The danger of course is that Santander refer the loans that they are not prepared to accept themselves. I hope that it will be possible to identify Santander referrals so that we can give them a closer look over.
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blender
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Post by blender on Jun 24, 2014 17:22:47 GMT
When a relationship with Santander was mooted in Autumn 2013 we thought it might be something to worry about, an arrangement whereby Santander's higher risk applicants were jointly funded for example. But they really have brought forth a mouse here - rather like declaring themselves best friends. Each will promote the other to those it cannot help. It just means that they could not agree on anthing of more substance, does it not? It can do no harm.
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wysiati
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Post by wysiati on Jun 24, 2014 18:21:19 GMT
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Post by batchoy on Jun 25, 2014 5:40:57 GMT
Being ever the cynic, I see this as Santander using FC as a figleaf to protect themselves against the onslaughts of Vince Cable berating the banks for their lack of business lending. They can now continue with not lending to businesses but are able to say that they are providing advice to business on where to get loans.
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Post by goldservice on Jun 25, 2014 8:32:57 GMT
Being ever the cynic, I see this as Santander using FC as a figleaf to protect themselves against the onslaughts of Vince Cable berating the banks for their lack of business lending. They can now continue with not lending to businesses but are able to say that they are providing advice to business on where to get loans. I don't think that is cynical. I see it as positive in the sense that banks notoriously lend only to very low risk ventures so Santander's rejects may include many suitable borrowers for FC.
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wysiati
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Post by wysiati on Jun 25, 2014 10:41:49 GMT
Being ever the cynic, I see this as Santander using FC as a figleaf to protect themselves against the onslaughts of Vince Cable berating the banks for their lack of business lending. They can now continue with not lending to businesses but are able to say that they are providing advice to business on where to get loans. FYI, I don't want to be an apologist for Santander but its UK corporate lending is c.£23bn, up 12% y/y, and of which just over 50% is with SMEs. Only c15% of oustanding commercial loans are from the pre-2008 vintages. The commercial loan loss rate is c0.5% so this might suggest some prior tightening of criteria (speaking to Goldservice's point). The targets for this segment appear more ambitious than this but they are just targets which of course might not be met. The FC announcement 7 days ago basically acknowledged that this is taking place against the backdrop of consultation as to whether it should be made mandatory for rejected applicants to be referred to alternative finance providers.
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