Doorstep lender Non-Standard Finance prepares fundraising bid
EMBATTLED doorstep lender NonStandard Finance has been given more time by a major lender to find fresh funding.
The company claimed it does not need new money to survive but said yesterday that it had held positive talks with its major shareholders over an equity fundraising to allow it to grow its business.
NSF’s boss was forced last week to deny that his company was on the brink of collapse when it revealed that the pandemic had triggered material uncertainty about whether it could continue as a going concern.
The company, which lends money at high interest rates to more than 100,000 consumers with poor credit ratings, suffered a major hit after it was forced to halt lending for about two months during lockdown and grant automatic payment holidays to customers who asked.
NSF was facing the possibility of private equity firm Ares withdrawing a £200m funding line yesterday if it failed to come up with new funds to remedy a breach of the terms of the finance deal.
It confirmed yesterday that Ares had extended a waiver to allow it to find a longer term solution to its financial woes.
Shares in NSF closed down 3pc at 7p yesterday.
Another subprime lender, Morses Club, has been hit by the collapse of payments firm Wirecard, which issues cards for its U Account customers.
The Aim-listed lender said customers of U Account – a current account service that makes up 2pc of Morses Club’s revenues – have had their accounts frozen without prior notice from Wirecard after the City watchdog clamped down on Wirecard’s UK subsidiary at the end of last week.
U Account customers’ money is held by Barclays, meaning the funds are ringfenced and are not at risk, Morses said.
Paul Smith, chief executive of Morses Club, said: “While our customers’ money is not at risk, we understand the difficulty this temporary suspension is causing our customers and we are working tirelessly to find a solution.”