Troubled sub-prime lender forced to constrain key divisions
Nottingham-based sub-prime lender Morses Club has been forced to dial back lending in its home collected credit (HCC) and digital divisions after its backers decided not to provide a peak trading advance against the company’s loan book for the period from 15 November to 14 February 2023.
In a fresh blow for the embattled firm, Morses’ CFO Graeme Campbell told the London Stock Exchange the company has been forced to “take steps” to constrain lending in key areas despite its existing £25m funding facility remaining in place until 31 March.
The news follows warnings that Morses could enter insolvency unless it agrees a Scheme of Arrangement after it suspended processing claims made against its “unaffordable” loans.
In September, the lender said it was racking up losses and struggling to generate new cash as new client numbers tumbled and its loan book figures decreased by as much as a third.
In a statement this morning (15 November), the company said its funders have “continued to grant a deferral of the testing of two covenants”, and that there has been “no breach” of the covenants to date.
Last month, Sir Nigel Knowles – the former chair of Sheffield City Region Local Enterprise Partnership – relinquished his position as chair of Morses Club to concentrate on his role as CEO at DWF Group.
