A number of firms within the non-conforming, prime and buy-to-let arenas have already been forced to re-adjust their offerings following the credit crunch and a number of sources have informed Mortgage Introducer that the commercial lender was still struggling to obtain a funding line and that its sales staff had been made redundant.
One source said: “It hasn’t got any funding so there’s obviously no need to have a sales force. Everyone’s gone so that means it won’t be doing any business in the near future.”
5D Finance had placed 19 members of staff on consultation periods in mid-December, while it had temporarily restricted new lending because of issues over obtaining a funding line.
Paul Marland, sales and marketing director at Base Commercial Mortgages, said his conversations with staff at the firm were positive but it still had a number of challenges to overcome.
“When I spoke to the senior management recently, they were positive that it could secure a funding line in the future so they are confident that it will be back in the market.
“However, the sales team have come to the end of their consultation period and they are not back on the road so, with no funding in place, 5D definitely won’t be back in the market just yet.”
He added that many advisers would think twice about using the lender again, due to the short time span given to brokers to complete deals.
“It also has the problem that 5D is a damaged brand now. It pulled a lot of products very quickly and upset a lot of brokers, who were left to scramble around to try and place cases.
“Brokers have long memories and with plenty of options out there for them now, with the likes of Interbay and us all establishing ourslves in the market, it will make it more difficult for 5D to re-establish itself.”
In a statement, joint chief operating officer of 5D Finance, Owen Espley, insisted that the company still had plans to return to the market, but only at the right time, and would operate a considered re-entry to the sector.
He said: ‘We are still analysing the situation and reviewing our pricing in light of the ever changing market place. We will relaunch our product range when we are satisfied that the time is right.’