There was yet another blow for the already hard pressed secured loan industry with the news announced in the last few days that Link Loans was ceasing trading. This was due to their inability to obtain any further funding.
Simply a few days before this Link Lending, out of whom Link Loans sprang, went into administration due to the fact that Barclays Bank who funded them refused to give any more funds for them to lend. This meant that the state of Link Loans was not strong.
How Link Loans expected their funding to continue is a mystery, as they were a part of Link Lending, and when Link Lending, which arranged bridging loans, fell it was to be expected that Link Loans was almost certain to follow suite.
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.
The secured loan broker did have underwriting guidelines to follow, as with all other secured loan lenders, but thereafter the rest of the application format was a bit different than it was with other secured loan lenders.
When a secured loan broker made the decision that Link Loans was the best secured loan lender for their customer’s needs, they had to carry out a credit check on the prospective borrower. A land search had then to be carried out This was then forwarded to Link Loans who did not have the authority to approve the application. They had to give all the information to their funders to ascertain the prospective borrower’s suitability.
When their approval was granted the secured loan broker would be notified that they could proceed with the application.
Other secured loan lenders had the authority to approve secured loan applications themselves.
Want to find out more about secured loans, then visit Liz Moir’s site on how to choose the best secured loan for your needs.
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