Target launches new lender incubator

Sarah Davidson

June 18, 2015

The “lender in a box” concept will allow companies hoping to become a fully regulated mortgage lender to lend through Target using its FCA permissions while they go through the authorisation process.

The firm said it is already in talks with several lenders hoping to launch imminently.

Paddy Byrne, chief executive of Target Group, said: “Our role is to facilitate those who have capital and want to deploy it quickly into the market.

“Our expertise is in delivering servicing to lenders so the vision for this proposition is to become an incubator for new entrants.”

Target is imposing a responsibility on lenders using its permissions to lend initially to achieve their own FCA permissions within a fixed timescale.

Byrne added: “We would not allow a lender to rely on our permissions indefinitely, our intention is to facilitate market entry.

“This proposition is not a way of sidestepping the FCA. Our due diligence dictates that users need to show they are moving towards achieving their own permissions.

“Whilst lender in a box will allow businesses to deploy their capital and come to market quickly we will also be working closely with clients to ensure they are in a position to achieve full regulatory compliance themselves as quickly as possible.

“Our proposition will be run totally in line with the FCA and putting our permissions or our relationship with the FCA at risk is not an option for us.”

The plan has been disclosed to the FCA with the proposition “clearly defined” in the firm’s strategic overview as part of its regulated business plan.

Byrne added that when lenders using the service had achieved their own authorisation they would be free either to continue using Target to service their loan books or to move their operations elsewhere.

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