D.G. Owens

Payday lender Wonga helps small businesses to Carey Street

admin — Wed, 09 May 2012 17:43:44 +0000

Wonga, the online lender that charges annual interest rates of 4,000 per cent on short-term loans, has launched a service for cash-strapped small businesses that offers to make credit available in as little as 15 minutes.
Announcing its venture on bank holiday Monday, when traditional high-street lenders were closed, Wonga said it hoped to provide an alternative source of funding for the struggling small business market.
The group, whose rates have been criticised by MPs and consumer groups, is charging between 0.3 and 2 per cent a week for business loans of up to £10,000. Customers will also have to pay an arrangement fee of 1 to 5 per cent of the loan and make repayments on a weekly basis or risk penalty fees of £20 for each missed instalment.

The price structure means a business borrowing the maximum amount of £10,000 over the maximum term of a year could be faced with costs of almost £11,000, more than the original loan. The average cost for a small business loan is less than 4 per cent a year, according to research by the Bank of England.
The Federation of Small Businesses, said companies considering using Wonga should be absolutely sure they can repay the loan on time to avoid the punitive penalty fees. The service might provide some flexibility on short-term finance but businesses should tread with caution.

Interest-only loans disappearing fast

admin — Tue, 08 May 2012 09:36:52 +0000

Borrowers who want to use alternative methods of paying off a mortgage are fast running out of options. Co-operative Bank will stop giving any new customers the option of taking out an interest-only home loan, and will insist that all mortgages are set up on a capital and repayment basis.
Existing interest-only borrowers with the bank will be able to switch to other products from Co-op Bank’s mortgage range and continue paying just the interest when their current deals expire provided they are borrowing the same amount or less.The Co-op’s move will further restrict the remortgage options for homeowners with an interest-only loan.
Lenders have been making it increasingly difficult for borrowers to get an interest-only mortgage following moves by the Financial Services Authority (FSA) to stop borrowers taking on more debt than they can afford. While the FSA has not banned interest-only loans, it indicated in its latest rules on responsible lending that they should be used only by consumers with a realistic and credible repayment strategy.

The average price of a UK home fell sharply in April

admin — Fri, 04 May 2012 11:22:46 +0000

The average price of a UK home fell sharply in April, according to the Halifax house price index, more than wiping out a rise in March when buyers rushed to take advantage of a tax break that was expiring at the end of that month.
The ending of the stamp duty holiday for first-time buyers in late March appears to have boosted home sales early this year as buyers strove to meet the deadline, and has probably contributed to the volatility in house prices in the last few months,
Average house prices in Britain are no higher than they were in July 2009, just a few months after they hit their trough.
Furthermore, some mortgage rates have risen recently due to lender’s higher borrowing costs in wholesale markets and this could well weigh down on housing market activity, However, there are signs that the stamp duty holiday had probably contributed to housing turnover. The volume of sales in the first quarter was the highest since the first quarter of 2008.

admin — Thu, 03 May 2012 10:21:58 +0000

Botox and breast implants continue to sell well in Europe in spite of soaring unemployment and severe austerity measures.
David Pyott, chief executive of Allergan, said that his company generated double-digit growth in sales of breast implants in Europe during the first three months of the year, compared with the same period a year ago. Sales of Botox, the wrinkle smoothing injectable medicine, are also picking up in spite of economic headwinds.
In southern Europe, people spend a higher proportion of their income on appearance and lifestyle. They are happy to live in a modest apartment and look good facially and body-wise when they go out.

Fiscal drag pushes up number of top-rate taxpayers

admin — Wed, 02 May 2012 11:00:09 +0000

Data published by HM Revenue & Customs shows that the total number of top-rate taxpayers has hit 4.1m, with more than 300,000 of that number paying the 50% additional rate. The total number of taxpayers, though, is set to drop this year from 30.1m to 29.7m as the lowest-paid are removed from the tax system as a result of an increase to their personal allowance.

L&G enters property lending

admin — Tue, 01 May 2012 08:46:44 +0000

Legal & General has made its first foray into property lending as the insurer bids to take advantage of the gap in the market created by the retreat of bank finance.
The company has agreed to provide Unite, the UK’s largest developer and manager of student housing, with a £121m loan. The move is the start of what L&G hopes to build into a multibillion-pound lending business.

Trading whilst knowingly insolvent a director can face a financial action

admin — Wed, 25 Apr 2012 15:08:55 +0000

As liquidator, perhaps surprisingly, a wrongful trading claim is not the simplest of actions to bring for two reasons.

Firstly, as a Liquidator you need to pin point the exact date when the company director(s) knew or ought reasonably to have known that there was no prospect of avoiding insolvent liquidation. The test for directors competence is set out within section 174 of Companies Act 2006 and states that a director must exercise the reasonable care, skill and diligence of a person carrying out such a role. It follows therefore that ignorance is no defence.
The mere existence of an insolvent balance sheet is not, on its own, grounds for a wrongful trading claim.

Secondly, you need to show that the position worsened year on year or month on month from the crystalising date you have identified. If you can pin point that date, it is possible to bring an action for the loss suffered between the pin pointed date and the date of commencement of the liquidation.

Be mindful that directors have a fiduciary duty to act in the interests of the company and its creditors rather than their own.
Knowingly and wilfully trading whilst insolvent can remove the veil of limited liability.

Story from: Lawrence King of Critchleys

Claimants in dark about PPI claim fees

admin — Mon, 23 Apr 2012 10:03:47 +0000

A quarter of consumers seeking compensation for mis-sold payment protection insurance do not know that claims management companies take typically take a 25 per cent cut of the compensation, plus value added tax.
In January. the Financial Services Compensation Scheme said that more than three-quarters of PPI compensation claims it had received in the past four years had been submitted through a claims management company.
This comes despite an analysis by the FSCS showing that there is no material difference to the success rate of claims made by individuals.
Martin Lewis, founder of MoneySavingExpert.com said: "Sadly, PPI has become a cash bonanza for unscrupulous claims companies."
The consumer advice group is about to launch a radio campaign and is staging a "PPI summit" on Monday with banks and regulators to increase consumer awareness about how to claim back money themselves.

Repossessed Spanish homes fall in value

admin — Thu, 19 Apr 2012 09:33:47 +0000

Repossessed properties in Spain are selling for about half their original value and are likely to continue to fall in value, according to a new report, underlining the parlous state of the real estate market in Europe’s fourth-largest economy.
Valuations on properties that were bundled up in securitisation deals and later repossessed are also significantly lower than data from the official housing price index suggest, according to a report from rating agency Fitch due to be published on Thursday.

Man Utd’s tactics a whole new ball game

admin — Tue, 17 Apr 2012 11:13:19 +0000

The Premier League has been the most professionally run league in football. We are leaders in a sport that is growing. There is growth to come. It is exciting. The World Cup is getting bigger. The Champions League is getting bigger. The Premier League is getting bigger.
Spiralling costs, principally players’ wages, and mismanagement among some prominent British clubs have seen Portsmouth and Rangers enter administration in recent months. However, ambitious clubs will continue to spend to stay in the league and wages will not moderate.

The Glazers, owners of the Tampa Bay Buccaneers NFL team, were right to recognise the untapped potential. Man U has invested in people – 40 in London on the commercial side. We are acting much more like a FTSE 100 company.
He cites a deal with Turkish Airlines that features players in safety videos for passengers and the deal with DHL to sponsor training kit, worth £40m over four years. Our revenue is one-third-match day, one-third from commercial revenue and one-third from TV. Commercial revenues are very high margin and long term.
Gross debt, though falling, stood at £439m at the end of 2011.

Research in 2007 found the club had 333m fans worldwide. It has 20m Facebook friends. It recently bought joint venture partner ITV’s stake in MUTV, its dedicated TV channel, and the international rights so it could tap the subscriber data.