THE boss of the lender Amigo says it is “not the Amigo of old” after the business unveiled plans to lend again under a new brand name.

The Bournemouth company, which suspended lending in March 2020 amid a flood of mis-selling complaints, wants to offer two kinds of loan under the name RewardRate.

Its move comes after the High Court agreed a scheme for capping compensation to mis-selling complainants.

Amigo, based in Commercial Road, employs around 200 people. 

Chief executive Gary Jennison told the Daily Echo the business was taking “one step at a time”.

It needs permission from the Financial Conduct Authority to begin lending again by next February and carry out a rights issue to raise funds by May 2023.

“If either of those two decisions isn’t made, then I’m afraid the business goes into a wind-down,” he said.

Amigo’s business was built on offering loans at an annual percentage rate (APR) of 49.9 per cent to borrowers who could find someone to act as guarantor.

RewardRate would offer personal loans at 49.9 per cent APR without a guarantor, as well as guarantor loans at 39.9 per cent.

Customers with either loan could see their rates cut to 34.9 per cent APR for making payments on time.

There would be no lending under the Amigo brand name, although the company would still be called Amigo.

Mr Jennison said: “It’s a transition. We think RewardRate is a good message because it rewards customers with reduced rates if they pay on time.

“It may be at some point in the future we’ll change the name of the PLC or the holding company.”

He added: “We’re not the Amigo of old because the business is very different.

“The new proposition is much more affordable, it’s much more flexible for customers who have very few options to borrow.”

He said there was a new management team, a new culture and a new approach to lending.

“We’ve changed all that. We thought we’d changed so much, it’s really sensible we go out with a new name,” he added.

He said there was a “big under-served market out there”, with an estimated 12million-15m people not able to borrow from the UK’s mainstream lenders.

Mr Jennison said Amigo had been lending £40m a month in the recent past, whereas the new model would see lending capped at £35m ahead of the proposed rights issue.

But he said he hoped the business could grow again.

“Not only can we hopefully preserve jobs here but we can also hopefully start to expand – but probably in a year or so, rather than next month,” he added.

RewardRate would make loans of between £2,000 and £5,000 over two to four years. Customers would need a net monthly income of at least £1,000.

Borrowers would be able to pause payments once a year without penalties. The interest rate reduction for good payers would be turned into lower monthly payments.