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Blue Motor Finance and George Banco take on mainstream lenders

By Tony Willard

Two experienced executives are key players in new enterprises that will challenge established providers of dealer finance in 2015. One is targeting the prime car loan market, the other the sub-prime.

Bob Jones, executive chairman at Blue Motor Finance, is backed by private equity investor Cabot Square Capital, which acquired his company in November. Loan funds are provided by Citibank.

Jones, supported by a £200 million long-term funding agreement, expects to release pent-up demand for prime car loans. He says he has agreements with 15 dealer groups and brokers.

“They welcome a wider choice of finance for buyers of new and used cars with good credit ratings,” he said.

“The prime auto finance market has suffered from a loss of competition since the credit crunch.”

Jones, previously a main board director at Lombard North Central, said loan approvals could be provided within 50 seconds. Payments are made to dealers or brokers on the same day, “significantly improving cash flow and customer satisfaction”.

Robin Bridge, head of car finance at George Banco, was until recently chief executive at car supermarket Carcraft. The lender’s chief executive, Geremy Thomas, co-founded The Carphone Group.

Bridge said mainstream lenders were a serious threat to many dealers by often declining customers solely on a credit check.

“They fail to distinguish between serial defaulters and those with historic credit blemishes who have now stabilised their personal financial position,” he said.

George Banco, formed in November 2013, says a significant percentage of loans are for car purchases. It sees a “huge potential” for providing motor finance through dealers and brokers to “credit-impaired” borrowers.

Loans are up to £7,500, with no deposit requirements or limits on the age or mileage of the vehicle. Repayments must be guaranteed by a relative, friend, employer or work colleague “with an acceptable credit history”.

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