Turmoil in the credit market is permeating far and wide, even
into the niche SME lending sector. Specialist SME lessor, 1pm
posted an annual loss of £330,907 for the first quarter of 2007 and
exited the sub-prime loans market where it had been active in since
1998, to concentrate on funding small-ticket leasing
deals.
Go deeper with GlobalData
The Bath based firm floated on AIM in August 2006, but in
February the company realised it needed extra borrowing to meet
demand, and forecasted lower revenues and profits for 2007. It also
experienced a large number of delinquencies, even before the market
turmoil, and has since started to fund smaller businesses with a
proven payment history.
Chairman of 1pm, Michael Johnson said: “Following the flotation
in August 2006 the group found itself experiencing escalating
levels of delinquencies which demanded a detailed evaluation of the
underwriting and collection process together with the provisioning
policy and recovery potential.
“Through this process it became clear that the underwriting
criteria and the credit control procedures required an extensive
revision if the performance of the company was to improve. The
board has conducted a comprehensive case-by-case review.”
But 1pm’s luck is changing. Following a new underwriting policy
that was put in place to exclude any form of adverse credit, the
company also just recently installed a £250,000 block discounting
facility with a bank and has also recorded the highest ever value
in new proposals.
After withdrawal from the sub-prime market, 1pm also appointed
30 new brokers, two specialist legal collections lawyers and a new
finance director with a proven leasing background.
Furthermore, between February and June the company secured
recoveries of more than £145,000 – with more than £170,000 expected
between June and October.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataJohnson said: “I am delighted to report there is now the
opportunity for a new start based on the sound foundations we have
established that are now commencing to generate strong income
margins in their own right and the added advantage of the recent
restructuring already beginning to contribute positively to the
bottom line.”
