Amicus Finance

Amicus Finance, now formally known as Asta Funding, was a UK-based specialist lender that focused on providing secured lending to small and medium-sized enterprises (SMEs). They carved a niche for themselves by targeting SMEs who often struggled to secure funding from traditional high street banks, either due to short credit histories, unconventional business models, or a lack of substantial assets. Their core product offering revolved around bridging loans and property-backed finance. Bridging loans, typically short-term in nature (ranging from a few months to a couple of years), were designed to fill temporary funding gaps. This could be for a variety of purposes, such as covering expenses while waiting for the sale of a property to complete, facilitating property development projects, or seizing time-sensitive business opportunities. Property-backed finance, on the other hand, was secured against real estate assets, providing Amicus with security and allowing them to offer potentially larger loan amounts. Amicus differentiated itself through its flexible approach to underwriting. Unlike traditional banks with rigid lending criteria, they aimed to understand the nuances of each business and tailor their lending solutions accordingly. They emphasized a more personalized service, employing experienced underwriters who could assess the viability of a business plan and the value of the underlying security, even if the borrower didn't fit the typical bank profile. This focus on understanding the borrower's situation allowed them to take on deals that other lenders might have rejected. However, this flexible approach also carried inherent risks. Lending to SMEs, particularly those with unconventional profiles, is inherently riskier than lending to established corporations with long track records. Amicus's loan book, therefore, required careful management and robust risk assessment processes. In the years leading up to 2020, Amicus experienced significant growth, driven by a buoyant property market and increasing demand for alternative finance options. However, the COVID-19 pandemic and the subsequent economic uncertainty presented significant challenges. The property market slowed down, and many SMEs faced financial difficulties. This placed strain on Amicus's loan book, leading to increased defaults and concerns about their financial stability. Ultimately, Amicus Finance faced significant financial difficulties and was acquired by Asta Funding in 2020. Asta Funding, a US-based debt purchaser and asset recovery company, took over the business, marking a significant change in direction. The Amicus brand has since been phased out, and the focus has shifted to managing and recovering outstanding debts. The story of Amicus Finance serves as a reminder of the important role specialist lenders play in supporting SMEs, particularly those underserved by traditional banking institutions. It also highlights the inherent risks associated with this type of lending and the importance of prudent risk management, especially in times of economic uncertainty. The failure of Amicus underscores the vulnerabilities within the alternative finance sector and the potential impact of external economic shocks on even well-established lenders. While the Amicus brand is no longer active, its legacy as a prominent player in the UK's SME lending market remains.