Alternative lender Ultimate Finance is exiting the unsecured lending market in response to “market conditions,” according to the company.
Reports in Verdict.co.uk on Wednesday (Sept. 4) said the U.K. company pointed to volatility in the U.K. market for its decision, which will take effect immediately as it focuses on other loan products, including asset finance and invoice finance for small and medium-sized businesses.
While Ultimate Finance will not offer unsecured loans as a standalone offering, reports noted the company will connect business borrowers to cash flow loans in conjunction with the company’s secured loan products. Existing customers of unsecured loans will continue to be serviced by the company as well.
“We are committed to ensuring that our structure and strategy allows us to be responsive to market conditions and positioned to capitalize on our growth potential,” said Ultimate Finance Chief Executive Officer Josh Levy. “By no longer offering standalone unsecured loans and solely focusing on asset-based lending, we are prioritizing our core strengths and ensuring that our market proposition is clear and concentrated on our specialist areas of secured lending.”
He added that “evolution is needed to reach our long-term aspirations and to capitalize on the huge opportunity in front of us.”
Ultimate Finance’s plan to nix unsecured loans comes as the company posted a 21 percent increase in funding activity for the first half of 2019 compared to the same period a year prior. Reports also noted Ultimate Finance posted 200 percent growth since Tavistock Group acquired the company in 2015.
The company issued research in 2017 in partnership with BDRC Continental that pointed to the late payment challenge small businesses continue to face in the U.K., finding 94 percent of mid-sized businesses agree late payments impede their cash flow.
At the time, the firm’s director of strategy, Anthony Persse, said late payments are, “without a doubt, one of the biggest challenges faced by U.K. companies.”