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Advantages of obtaining a license for collateral-based lending:
Collateral is one of the traditional forms of minimizing credit risks. It is widely used by banks, pawnshops, leasing companies, and provides the insurance to the lender in case of bankruptcy of the borrower. Any person, who plans to engage in a business related to the provision of loans, must obtain a license for loan-collateral operations in Great Britain.
A secured loan is a loan, provided to an individual or legal entity secured by a property. Usually, a real estate, securities, vehicles, jewelry, appliances, art objects, etc. are used as a collateral. In case of default by the borrower, the lender has the right to compensate for losses through the sale of collateral.
A proposal or discussion of the conditions of a security loan is determined by the fact, that any of following actions has been completed:
Obtaining a license for collateral lending in Great Britain is not required, unless the person will carry out activities to provide loans. Recommendations and requirements regarding who can be licensed vary depending on the particular jurisdiction.
It should be noted, that it is always necessary to contact competent authorities of the jurisdiction in question in order to clarify the details of the requirements for a license for loan and collateral activities.
Next, the procedure for obtaining a loan-mortgage license in UK will be outlined in general terms.
Licensing of individuals is controlled by national authorities of the country in question, which are usually called the Commissions or Financial Services Market Regulatory Offices.
It should be borne in mind, that the company must have an office and premises for storing collateral property, that meet standards and rules of state building standards, sufficiently protected, using the necessary safety equipment. The institution should also have an active website, and notify the licensing authority of any changes to documents, that were submitted along with the license application.
The founders of the company must have an impeccable reputation, and should not have a debt or a criminal record. Professional qualities of directors and accountants must meet professional requirements.
The cost of the license and state fees, as well as the amount of the authorized capital vary, and are determined by the national licensing authority.
A person must comply with all minimum standards, established for the initial licensing and undergo all necessary checks, approved by the regulatory body.
This article is not published for informational purposes only, reflects a conceptual approach to licensing, and is not legal advice. Please note, that regulatory documents, governing the licensing of activities related to the provision of financial services, cover significant volumes,
and should be fully considered at the stage of project preparation, taking into account the commercial considerations of the future licensee.
If you have any questions, regarding the topic covered in the article, ask for individual advice on obtaining a license in Britain with IQD Consulting. Our specialists are also ready to provide accompanying services at all stages of company registration for financial activities and obtaining a license for credit-collateral activities in United Kingdom of Great Britain. To find out details about our services and sign up for a consultation, please contact us directly at the contacts indicated in the form below.