Trading under The Car Loan Centre brand, Asset Exchange Ltd (AE) is an asset-backed lender which operates in the UK car finance market, providing cars and car loans to borrowers who are unable to obtain vehicle finance through traditional lending sources. AE's business model is unique as a lender first and foremost but is supported by an online car supermarket. This enables the company to sell and finance cars nationwide and negates the need for multiple sales outlets to gain distribution. Revenues are earned from car sales, fees and interest on loans. 

AE is regulated by the Financial Conduct Authority and is the only consumer lender within its specific market sector authorised by the Financial Conduct Authority.

AE:

• Lends from £5,000 to £10,000 per customer
  
  
• Lends typically for 36 months to 48 months under Hire Purchase Agreements
  
  
• Charges an annual interest rate of 28% with a typical APR of 56%

AE combines experience, stringent underwriting criteria and technology to minimise risk.

Underwriting is based on customer affordability, not on credit scoring, with the company looking at bank statements and assessing a customer's true affordability for entering into a Hire Purchase Agreement. If a customer defaults on its agreement AE can locate the vehicle (via a tracking device) and recover it back into its possession. The vehicle can then be resold on finance after it has passed the company's stringent quality assessments, negating the need to provide for significant bad debts. 

Unlike its competitors, AE sells and finances its own vehicles which it sources itself, leading to:

• A profit on average for each car sold
  
  
• Quality assurance for each vehicle sold on finance
  
  
• Reduced credit risk. If a customer defaults on a hire purchase agreement, AE can locate the vehicle (from a tracking device fitted to the vehicle) and recover the vehicle back into its possession. This vehicle is then resold on finance, after it has passed the company stringent quality assessments, negating the need to provide for significant bad debts.

Security

The Bond will be secured by hire purchase agreements and the underlying vehicles. With future receivables amounting to 165% of the issued Bond amount. Security is maintained and topped up at the end of each month for repayment and defaults. So if a Customer defaults on an AE hire purchase agreement, AE will remove it and replace it with another live agreement, to ensure the level of security is maintained.

Bond Repayment

AE will repay the Bond from its long-term financing. The company is currently embarking on raising £50 million over a three-year period, of which £17 million will be deployed in Year 1. AE is currently in discussions with potential financiers, three of which already have access to the AE data room for due diligence purposes. Various meetings have been held with all, with due diligence questions raised and answered from the three parties.