Payday lender to begin offering business loans

One controversial payday lender has recently announced it will start to offer unsecured business loans to firms in need of finance, with annualised interest rates as high as 180 per cent in some cases, sparking a political row amongst government ministers.

Shadow business secretary, Chuka Umunna, had much to say of the news, stating that the foray into the business lending sector at the hands of payday loan provider Wonga is a ‘damning indictment’ of both the current banking system and the Coalition government’s failures to get working capital into the hands of the nation’s businesses.

Wonga, which specialises in unsecured payday loans with an annualised interest rate often exceeding 1,000 per cent, is charging much less for its business lending, but the fact remains that loans taken out from the lender are in no way inexpensive, Mr Umunna said.  If outfits such as Wonga feel that they can step into the business banking market and find no dearth of customers, there is something very wrong with the current state of the banking sector, the shadow business secretary added, placing the blame squarely on the shoulders of the Government.

Walthamstow MP, Stella Creasy, added fuel to the fire, stating that the Project Merlin scheme, created by the Government to encourage the nation’s banks to increase the amount of funds to be made available to the nation’s private firms, had failed to deliver on its goals.  Instead, companies have been left desperately attempting to ‘stay afloat,’ with the Labour MP adding that as payday loans have already ravaged the finances of countless households across he UK, it defies the imagination as to what they will do to the business sector.

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