Investment Guide Investment Guide by jennyyingdi


Does 10% p.a.
return on
                      So what is the
capital sound         investment opportunity?
Read on.              • The world “money markets” has             for Second Mortgages, Hire
                         seen significant change in the last       Purchase and Payday Loan
                         two years and the term “credit           products.
                         crunch” has been commonly used.
An annual return         The net result has seen a severe      • 1st Stop Group is well established
on capital of 10%.       lack of liquidity in the money           and financed by the current
                         markets due to lenders having to         directors and has an infrastructure
Funds secured            preserve and replace their balance       that can manage significant growth
against specific          sheets and recover from previous         This ensures all money invested is
                          lending policies. This lack of          used for further lending and is not
portfolio of loans,      liquidity in the lending market has      diluted by establishment costs. It
which are asset          created a large and unfulfilled           is secured by way of a debenture
backed.                  demand.                                  against a portfolio of loan
This investment is    • Experian, the UKs biggest credit
for high net worth       reference agency estimated the size   • Interest is payable up to 10% per
individuals only.        of the “non standard” market to be       annum throughout the investment
                         7.8M people in May 2008. This            period, compared to fiscal
Our minimum              figure will have risen significantly.      predictions for interest rates on
                                                                  cash deposits, which remain below
investment is                                                     2% for the next 3-5 years according
                      • 1st Stop Group has successful
£25,000 up to            experience in underwriting and           to the Centre for Economic &
£1 million.              collecting in the non standard           Business Research
                         market, both in previous plcs and
Term of investment       more recently for the last three      • We can gear your investment
36, 48 or 60             years within it’s own lending            by an amount between £25,000
months.                  portfolio. 1st Stop Group currently      and £1m and agree a term from 36
                         generate in excess of 350,000            to 60 months. At the end of the
                         applications for credit per month        agreed term you may like to invest
                         and is looking to secure additional      again or alternatively realise your
                         funding to satisfy market demand         capital.
Why 1st Stop?
Experience! There is no substitute         In the event that an account falls into
and we have operated for many              arrears in your portfolio we will
years in the non-standard lending          replace it with an up to date account
market. The current and foreseeable        from our own established portfolio.
lack of liquidity in the consumer
lending market has created a               We have taken a cautious approach
substantial pent up demand. This           to “Bad Debt”. Our plans are
also provides a great opportunity to       predicated on arrears of 14% with a
be very selective of future customers.     bad debt ratio of 4% p.a. In reality,
                                           since the inception of the lending
Historically, competitive pressures in     book in November 2007, the actual
the consumer lending market have           arrears have been circa 7% to 9%
pushed lenders into taking what are        with a bad debt ratio below 4%.
now understood to be inappropriate
risks for unacceptably low returns.
These forces no longer exist in
today’s market as most lenders are
unable to operate due to the lack of
availability of wholesale funding
lines. 1st Stop Group can therefore
be client selective in respect of credit
risk and product pricing.

1st Stop Group do not have a legacy
portfolio of ”toxic loans” which are in
default or negative equity, unlike
other lenders, and therefore we do
not need to commit significant
resources to recovering defaulting
“   The only source of knowledge is
    – Albert Einstein   ”
Secured Loans
Ist Stop Group takes a prudent approach in it’s lending policies. Whilst we take security
against the customer’s property, we also strictly adhere to the Office of Fair Trading
guidelines and ensure that the customer has both the ability to repay their loan and
established intent to repay their loan.

Payday Loans
1st Stop Group also provide short term Payday loans. These are used as low value, low risk
advances. If the client demonstrates the intent and ability to repay then the client is offered
a higher value product within our product lifecycle.

Hire purchase
Ist Stop also offer Hire Purchase contracts. The car financed represents our security. The
security is registered with HPI to ensure that our interest is recorded on the vehicle. Whilst
the security of the asset is very important we carefully assess the individual customer to
ensure that he/she has the intent and ability to repay our loan.

From the customer’s perspective their car is essential but should they unfortunately default
on payments the security can be realised very quickly. The customer is fully aware of these
Market sizing
•   Secured lending new business volumes in Q2                customers and stop serving the customers at
    2009 were down 84% vs. Q2 2008 due to a lack              the lower end of their scorecards.
    of funds in the market.
                                                          (Source: Experian May 2008)
(Source: Finance and Leasing Association)
                                                          •   1st Stop Groups ‘base case’ business model is
•   The size of the non standard market was                   predicated on only writing c.£2.4m of new
    estimated at 7.8M customers of which 5.5M                 secured loans each year (c.400 loans), which
    would meet a generic profile of a motor finance             represents less than 0.02% of the total lending
    customer. This was overlaid with a model taken            (not for house purchase) secured against
    from their existing credit bureau agreements              residential property in the UK, which exceeded
    showed only 6.5% of those customers actually              £19b in Q2 2009. This figure has increased year
    had a car on finance (although there would be              to date in 2010.
    others with a car financed by a personal loan).
    The non standard market is growing as                 The huge demand for our product types and the
    mainstream lenders focus on better quality            market underserve allows us to be very selective.

•   There is a lack of liquidity in the market due to         onto the market has resulted in second hand car
    the availability of funds. Some that had taken            values increasing in real terms. This makes
    inappropriate risks to “buy market share” are             realising the value of cars recovered much more
    now restructuring their balance sheets and are            attainable.
    unable to lend. Their lending criteria is thus very
    restrictive.                                          •   The market has been underserved for the last
                                                              two years and there is significant pent up
•   The property market has settled down. Indeed              demand.
    prices have now started to slowly increase and
    are forecast to continue slowly rising over the       •   There are fewer lenders in the lending arena in
    coming years – an ideal time to lend.                     general and specifically in the “non-standard”
•   New car sales have been historically low over
    the last two years. This lack of stock coming
Our Target Market
Knowing our customer:                                 Bespoke products:

• In full time, stable employment.                    Secured Loans
• Able to demonstrate that they have the
  income to pay their new commitment.                 • Secured against the family home.
• Able to demonstrate that they have the intent       • Maximum loan of £10,000, with a minimum
  to pay by either a home visit or telephone            £1,500.
  interview.                                          • Typical Interest rate to customer - circa
• A risk profile that demonstrates that they             2% to 5% per month (within typical
  currently honour some existing credit                 market price range).
  commitments and a full explanation of any           • Typically repayable over a maximum period of
  credit history problems.                              60 months.

Security and best use of it:                          Hire Purchase

• A vested interest in the property used as           • Secured against the family car with equity.
  security for a loan as it is their family home or   • Typical loan range of £2,000 to £8,000. Tenants
  family car.                                           will be restricted to lower lend.
• A need to fund major expenditure, such as           • All loans registered and secured on vehicle
  home improvements (which will add value to          • Interest rate to customer - circa 12% to 24%
  their home and demonstrates pride in it), debt        flat (within typical market price range).
  consolidation (which generally increases the        • Repayable over a maximum period of 48
  ability to pay) or a car which they require for       months, typically 36 month or less.
  family use and to get to work .
                                                      Payday Loans

                                                      • Typical loan £150 initially with £250 upon
                                                        renewal .
                                                      • Repayment period up to 31 days.
                                                      • Loan is unsecured.
                                                      • Rate of £35 per £100 lend.
Lending Typical Examples
£3,000 Secured Loan                      £5,000 Secured Loan

Advance                  £3,000.00       Advance                  £5,000.00
Term                     36 months       Term                     60 months
Rate                     2.5%            Rate                     2.5%
Acceptance fee           £390.00         Acceptance fee           £650.00
Set up fee               £450.00         Set up fee               £750.00
Total Loan               £3,840.00       Total Loan               £6,400.00
Payment                  £163.01/month   Payment                  £207.06/month
Total Repayment          £5,868.36       Total Repayment          £12,423.60
APR                      63.8%           APR                      54%

£7,000 Secured Loan                      £10,000 Secured Loan

Advance                  £7,000.00       Advance                  £10,000
Term                     60 months       Term                     60 months
Rate                     1.75%           Rate                     1.75%
Acceptance fee           £910.00         Acceptance fee           £1,300.00
Set up fee               £1,050.00       Set up fee               £1,500.00
Total Loan               £8,960.00       Total Loan               £12,800.00
Payment                  £242.40/month   Payment                  £346.28/month
Total Repayment          £14,544.00      Total Repayment          £20,776.80
APR                      39.4%           APR                      39.4%
£2,400 Hire Purchase                     £5,000 Hire Purchase

Advance                  £2,400.         Advance                  £5,000.
Term                     30 months       Term                     36 months
Acceptance fee           £395.00         Acceptance fee           £595.00
Document fee             £75.00          Document fee             £99.00
Option to purchase fee   £125.00         Option to purchase fee   £125.00
Payment                  £137.42         Payment                  £244.00
Charge for goods         £1,992.60       Charge for goods         £4,008.36
Total repayment          £4,322.60       Total repayment          £9,008.36
APR                      65.6%           APR                      53.1%
£150 Payday Loan                         £250 Payday Loan

Advance                  £150.00         Advance                  £250.00
Term                     up to 31 days   Term                     up to 31 days
Interest                 £52.5           Interest                 £52.50
Total Repayment          £202.5          Total Repayment          £337.5
Investment Options
As each of our lending products are held in individual companies, the investor can choose which product to
invest in. Investors have a choice of Home Loans, Car Loans and Payday Loans, with each product having
different merits.

Home Loans
For a customer to qualify for a Home Loan, their mortgage must be up to date with their main lender and meet
1st Stop’s underwriting criteria. 1st Stop will then take a unilateral notice over the customer’s property as
security on it’s loan. This means that in the event of the sale of the property or default of the loan, 1st Stop will
be in a prime position to recover any outstanding monies.

Car Loans
1st Stop will purchase a vehicle from a dealer on the client’s behalf via a Hire Purchase agreement. 1st Stop
owns this asset and hires to the client. On receipt of the customers final payment, the title to the vehicle reverts
to the customer. The car acts as realisable security should the customer default on the agreement.

Payday Loans
Whilst payday Loans do not offer any form of tangible security with the customer, the debt is effectively paid
back in full every month, making the loan immediately realisable. New loan advances are typically £150.00 so
the risk is minimised.

Secured Agreements
For each £25,000 investment block the company will issue an assignment over a batch of up to date customer
loan agreements.

Agreement replacement policy
To protect the investment against arrears, the company will replace any agreement held as security should the
customer become 2 months in arrears with an up to date replacement agreement. This ensures the investor
holds a healthy portfolio at all times as security.

Guaranteed by the company
Should the customers default to a level where their repayments do not meet that of the investors repayment,
and the company has no replacement agreements to issue then the company itself will guarantee the investors
A good team of operators
1st Stop has the enormous benefit of a             expenditure.
very strong Board and Senior                  •   An independent credit reference is
Management Team that has substantial              taken from a leading credit bureau,
experience in this specific finance sector.         confirming credit status, voters’ role
There is no substitute for walking the            information and current
hard yards and our combined experience            commitments.
ensures we have honed our skills in
making the right credit decisions, the        •   All customers are spoken to, prior to
right product offering and marketing to            release of funds so they understand
the right target audience.                        the credit commitment they are about
                                                  to enter and the consequences of non
We embrace the use of technology, much            payment. If the customer does not
of which is bespoke but no credit                 satisfactorily explain the reason for
sanction is automated. We may use credit          previous credit problems or doesn’t
score, but only to reject customers that          appear to demonstrate intent to
do not fit our strict underwriting criteria,       honour the agreement, we will
saving time and unnecessary cost.                 withdraw the offer of credit.

•   All credit decisions are agreed by a      •   All customer contact is managed at 1st
    Director or Senior Manager, none are          Stop Group by our experienced team –
    automated.                                    whether this be collection activity or
                                                  simple administration issues.
•   We ensure that we investigate the key
    facts provided by the customer. This
    includes full customer verification,
    documented income proofs and

An exceptional investment opportunity.
10% p.a. return guaranteed for the term of
Each investment is secured against
specific contracts.
All loans are secured against the
customers family home or car, depending
on the product chosen.
Contact Us
If you wish to discuss the opportunity
with our Investment Director, please
contact us via:

0844 372 5268



This communication is exempt from the general restriction          authorised person specialising in advising on investments of
contained in section 21 of the Financial Services and Markets      the kind in question.
Act 2000 (“FSMA”) on the communication of invitations or
inducements to engage in an investment activity on the             The information contained in this brochure is selective and
ground that it is made to certified high net worth individuals.     does not purport to contain all the information that recipients
At least one of the following requirements must be met for an      may require. Recipients should conduct their own
individual to qualify as a certified high net worth individual:     investigation and analysis of the business and its business
                                                                   proposal and of the information contained in this brochure
(a) Having had, during the financial year 2010 - 2011, an annual    and are advised to seek their own professional advice on the
income to the value of £100,000 or more;                           legal, financial, taxation and other consequences of investing
(b) Having held, through the financial year 2010 - 2011, net        in1st Stop.
assets to the value of £250,000 or more. Net assets for these
purposes do not include:                                           None of 1st Stop, nor its affiliated partnership or bodies
                                                                   corporate, nor the directors, shareholders, managers, partners,
(i) The property which is a primary residence, or any loan         employees or agents of any of them, has verified any of the
secured on that residence;                                         information contained in this brochure and no such party,
(ii) Any rights under a qualifying contract of insurance within    entity or person makes any representation or warranty, express
the meaning of the Financial Services and Markets Act 2000         or implied, as to the accuracy, reasonableness or completeness
(Regulated Activities) Order 2001;                                 of the information contained herein. All such parties, entities
(iii) Any benefit (in the form of pensions or otherwise) which      and persons expressly disclaim any and all liability for, or based
are payable on the termination of service or on death or           on, or relating to any such information contained in, or errors
retirement and to which the individual is (or his dependents       in or omissions from, this brochure or based on or relating to
are), or may be, entitled.                                         the recipients’ use of this information.

This communication is only directed at high net worth              This brochure includes certain statements with respect to the
individuals who have signed the form of certificate prescribed      anticipated future performance of 1st Stop and as to the
by FSMA under which, inter alia, an individual may self-certify    market for its products. Such statements reflect various
that she/he meets the criteria listed above. The controlled        assumptions made by the management of 1st Stop which may
investment or controlled activity to which this communication      or may not prove to be correct.
relates is available only to high net worth individuals who have
returned a signed copy of this certificate to 1st Stop              No representation is made as to the accuracy of such
Any individual who is in any doubt about the investment to
which this communication relates should consult an

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