Key points:
- The Amigo Loans share price spiked 28% higher on the latest update.
- The lender revealed that it would resume lending as RewardRate.
- The guarantor lender also unveiled new customer-friendly rates and features.
The Amigo Holdings PLC (LON: AMGO) share price surged 28% after the guarantor lender unveiled a new plan that will see it resume lending activities under a new brand known as RewardRate.
The new entity will offer both personal and guarantor loans, with the personal loans attracting a 49.9% starting rate that can be reduced to 34.9% with timely repayments. Guarantor loans will attract a new starting rate of 39.9%, which can drop to 34.9%. The new guarantor loan rate starts 10% lower than its previous rate.
Also read: The Best Financial Stocks To Buy Right Now.
Amigo will retain the Amigo Holdings Plc and Amigo Loans Ltd names as part of the regulated entity but will no longer offer loans under the Amigo brand. Any new loans issued by the company after resuming lending activities will be issued under the RewardRate brand.
The guarantor lender estimates that over 12 million adults in the UK cannot access loans from traditional lenders and is targeting this group, which could benefit from its personal and guarantor loans.
The lender also pointed out that the new management team, which took over in September 2020, has prioritised customer support as a critical pillar of its business strategy. The same appears true, given that the company just announced a new feature that allows its customers to pause their loan repayments once a year without incurring penalties.
Amigo also pointed out that the demand for guarantor loans has surged since the COVID-19 pandemic, driven by job losses and the rising popularity of the gig economy, coupled with the exit of multiple specialist lenders from the market.
The lender said it is keen to meet all the requirements set by the UK’s Financial Conduct Authority (FCA), including the court sanction of its new business scheme, which happened on May 26, 2022. The firm is also keen to limit its new lending to £35 million until the proposed capital raise is completed.
The FCA is also keen to ensure that Amigo meets specific threshold requirements and that its lending system has been thoroughly tested before it can resume lending. So today’s announcement marks a crucial step toward the company restarting lending activities.
*This is not investment advice. Always do your due diligence before making investment decisions.
Amigo Loans share price.
The Amigo Loans share price surged 28.07% to trade at 6.25p, rising from Monday’s closing price of 4.88p.