The document analyzes the non-standard lending market in the UK. It finds that the commercial non-standard lending market lent £6.4 billion in 2012, up from £4 billion in 2008. Over 10% of UK adults have used some form of non-standard lending in the past two years, with private loans being the most common. Non-standard lending is viewed as convenient but can also lead to financial problems. The document also examines advertising expenditures for secured personal loans and the use of various non-standard lending products among different demographic groups.

1. Analysis of the Logbook Loans market & initial proposal
February 2014

2. Non-standard lending
Source: YouGov SixthSense, Non-Standard Lending
March 2013
The commercial NSL market lent £6.4 billion gross in 2012, compared with £4 billion in
2008. This excludes borrowing from private individuals and covers only commercial
lending.
The amount of gross new commercial lending rose by 60% between 2008 and 2012. Private
(non-standard) lending has increased by around 31% between 2008 and 2012.
Over one in ten adults have used one form of NSL product over the past two years. Private
loans to individuals are the most important form of non-standard lending, followed by
using a credit union and payday loans. Based on their usage, NSL products split into three
types:
Those used mainly by ABC1 consumers – e.g. private lending, motor vehicle logbook loans.
Those used mainly by C2DE consumers – e.g. loans from a credit union, payday loans,
home credit, buy to rent retail excluding car loans, loans from a peer-to-peer lender.
Those used evenly across the socio-economic grades, but which have a bias towards adults
in social housing (e.g. housing association or local authority renting) – pawnbrokers, family
loaning pool, cash advance on salary from an employer and mobile phone loan by text.
14% of adults aged 18+ have used a NSL product in the past two years, equivalent to 7
million adults.
Over this time, 5% have taken a private loan from individuals, friends and/or family, 3%
have borrowed from a credit union and 2% have taken a payday loan.

3. NSL typically viewed as convenient
Source: YouGov SixthSense, Non-Standard Lending
March 2013
Consumer attitudes towards NSL products can be grouped into three main
categories. On the plus side, they offer quick, convenient and easy solutions to
financial problems (i.e. making it easy and convenient to pay for things). They can
also aid financial management and planning (i.e. making it easy to track spending).
However, on the negative side, they can lead to financial entrapment or pain, leading
the financially naïve or disorganised into debt.
The more borrowers have been turned down for mainstream finance, the more likely
are they to use a NSL product. In particular, users of commercial NSL products are
likely to have been turned down for a credit card, bank overdraft or unsecured
personal loan. Thus non-standard lending is often used to finance a specific
expensive item (as a personal loan or credit card would), pay for day-to-day
household spending or outstanding bills (like a credit card or overdraft would), or
finance a particular occasion (as a personal loan and credit card would).

4. Secured personal loans
Source: Key Note, Motor Finance
2013
Main media advertising
expenditure on secured
personal loans fell significantly
during the credit crisis and the
resultant recession but has
been recovering, increasing
from £708,000 to just under
£2m between 2010 and 2012.
Logbook loans are loans
secured against the value of a
vehicle the borrower already
owns, using the vehicle as
collateral rather than a house.
It is unlikely, therefore, that
these loans would be used for
motor finance but individuals
may wish to purchase a second
car by using finance raised in
this manner.

5. Use of NSL products in the past 2 years
Source: YouGov SixthSense, Non-Standard Lending
March 2013

6. NSL: demographic characteristics
Source: YouGov SixthSense, Non-Standard Lending
March 2013

7. Use of NSL products, by financial health
Source: YouGov SixthSense, Non-Standard Lending
March 2013

8. Use of NSL products, by social grade
Source: YouGov SixthSense, Non-Standard Lending
March 2013

9. Current type of borrowing, by future
intention (among borrowers)
Source: YouGov SixthSense, Non-Standard Lending
March 2013

10. Payday lenders petering out?
Source: YouGov SixthSense, Non-Standard Lending
March 2013
Payday lenders are the more
vulnerable in terms of losing
future borrowers. A much
higher percentage of those
that will not continue
borrowing in the future
currently use payday loans
compared with those that
will continue to borrow.
In contrast, home credit,
pawnbrokers, peer-to-peer
lending and a cash advance
on salary look set to grow in
importance in the future.
The weakness of this sector
is that future growth will be
concentrated among a less
financially healthy base of
customers.

11. Quick Review ~PPC
It's a heavily subscribed
marketplace where each
player will consistently outbid
each other to achieve the top
spot.
The current winners seem to
be Google and sites with big
pockets.

12. Quick Review ~ PPC
Analysis of your current search terms indicates you are likely to be spending as
much as you can on the specific terms your current provider has been using
Approx 30 clicks per day to generate 7-10 applications suing Google estimator
Your options? Go wide… target ambient key words and phrases at lower rates

13. Quick Review ~ competitors sites
 
Clear criteria listed
Cluttered
interface, text
heavy
Meeting points and
store locator
No quote form on
front page
Specifically targets
the prestige car end
of the market
No strong calls to
action

14. Landing Pages could work?
A number of competitors are
using custom landing pages to
pull in relevant traffic.
Typical landing page subject
areas are around log book
loans, using your car as
security, why a secured loan
against your car may be better
than a pay day loan etc.

15. Your social media
We touched on this briefly. There's
been a lot of talk about how great
social media can be but also some
horror stories of companies
spending a fortune and getting it
wrong. We can help you engage
more positively with social media
platforms like Twitter and
Facebook.
We think you should consider the
most appropriate tools for your
business. What's worse than not
being on social media at all is when
a business sets things up and leaves
it all empty. This often sends
completely the wrong message to
potential customers who, more and
more, are using social media to
validate buying decisions.

16. Thinking about Social Media…
6K 450 200
Easily create an auto feed using RSS and XML to
auto tweet consumer relevant news. Turn on
notifications for replies and direct messages and
have someone check the accounts daily from
their phone
Custom Landing Pages
These are really simple to write. You, or a half
decent copy-writer, could generate several
relevant pages within a few hours. They don't
need to be long, just a few short paragraphs
dealing with a common customer question - and
make sure you include your quote form and
telephone number on each of these pages
though!

17. About Goodman & Next Steps
We trust you found this market analysis and proposal of interest
Our services all share a common foundation based on as full an
understanding as we can have of our client’s or potential client’s business
Any media planning or design briefs are considered in relation to realistic
market potential and trackable spends
We want to make recommendations based on facts not feelings
As well as our own experience, we now have direct access to a plethora of
premium insight and planning tools including YouGov SixthSense, Key
Note, IBISWorld, Trajectory Partnership and Iconoculture in addition to
a powerful global news database, Nexis, so as we are tracking your
markets we can update this as soon as new information is released
Goodman is a fully accredited media and advertising agency based in
central London. Established in 1997 we pride ourselves in always
working hard to buy better and more effectively for all our clients
regardless of budget or business type
To move this all forward, please let us take care of everything – just give
us a call 0845 225 55 55 to arrange a time to work out the details of what
you want to happen – if its not too presumptuous we really look forward
to working with you...
www.goodmanassociates.co.uk