Southampton-based UK lender Raphaels Finance has exited the asset finance and motor finance markets with immediate effect, Leasing Life and Motor Finance have learned.
According to a letter circulated to brokers on 17th May last week, which LL & MF has seen, the funder told brokers that a strategic business decision to exit the market had been made by the parent bank.
It said all new business lending operations in motor and asset-related new lending would cease from the 17th May.
It is understood that the bank will continue to honour pay-out of all approved finance transactions for which brokers hold a written confirmation of approval prior to last Friday.
The bank said the paperwork must be with it by this Friday, the 25th May, for the lending to be approved, and that there would be a 30-day extension for those with a 30-day notice in their terms of business agreement. This would be subject to GDPR-related administrative processes.
Carl Virgo, head of lending at Raphaels Bank, wrote to brokers: “We thank you for your past support and would like to take this opportunity to wish you and your business every possible success.”
Motor Finance understands from several sources that affected brokers have since approached other lenders with related queries for new business.
It is understood by MF and LL that the lender is no longer a patron of the National Association of Commercial Finance Brokers, but Raphaels Bank is listed as an FLA member in the FLA’s 2018 annual review.
In 2010 Raphaels Bank acquired motor finance lender Southern Finance – both were part of the Lenlyn Group.
Southern, established in 1957, was renamed Raphaels Finance in 2015, meaning that the bank and the business have had contact with the motor finance market for over 50 years.
Raphaels Finance joined the FLA’s asset finance division in 2015, appointing Ashley Davies as business development manager for the division at the time.
Raphaels Bank declined to comment for this article.