Car retail pioneer joins George Banco to head new dealer push
Alternative lender George Banco has announced that it is now making its guarantor loans available via motor dealers, enabling them to broaden their penetration of the non-prime sector.
The company says its decision is based on the “huge potential” for guarantor-backed motor finance which it has identified among credit-impaired borrowers.
Although George Banco was formed just a year ago in November 2013, it reports that around 30 percent of the personal loans it has already made are made for car purchases.
Now, says the company, it plans to concentrate on motor retailers and brokers as the mechanism to drive forward its expansion in the vehicle finance market.
In order to help achieve its ambitions, George Banco’s senior management team has now been joined by Robin Bridge, until recently the CEO of used car supermarket group CarCraft.
Robin joined CarCraft 17 years ago at the company’s sole outlet in North West England, and helped head up its growth to a multi-site operator now turning over around £140m annually.
He believes that mainstream lenders present an increasingly serious threat to many motor dealers by often declining their customers solely on the basis of a credit check.
As such, says Robin, they fail to distinguish between serial defaulters and those with historic credit blemishes who have now stabilised their personal financial position.
George Banco, he states, addresses this by examining closely the ability of both the borrower and the guarantor being put forward to afford repayments.
This helps to ensure that neither party is over-committed, and allows the company to apply interest rates in line with a reduced level of non-prime risk.
Most importantly for motor dealers, says Robin, George Banco’s affordability checks can result in a previously declined customer being offered on-the-spot motor finance.
Applications are made on-line at the dealership, and a decision advised within minutes. The loan can also be issued the same day with confirmation of the dealer’s interest in the advance.
Cars loans of up to £7500 can be provided by George Banco, and there are no deposit requirements or limits on the age or the mileage of the vehicle.
“Even this long after the banking crisis, car retailers are still having to tell growing numbers of customers that their traditional credit lines are not available to them,” said Robin.
“There is a clear need for an alternative lending resource which doesn’t rely on a black-and-white reading of a credit report, and doesn’t penalise those who can demonstrate affordability.
“George Banco has successfully created a far more pragmatic and realistic approach to responsible lending, and we believe that motor dealers will be among the main beneficiaries,” added Robin.