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Buy To Let Specialist Paragon Gets Banking Licence To Finance Car Sales

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http://www.theguardian.com/business/2014/feb/18/paragon-buy-to-let-banking-licence-car-market

Solihull-based buy to let mortgage specialist Paragon has been given a banking licence as part of its drive to offer finance in Britain's booming car market.

The first firm to be authorised under the Bank of England's new regime designed to encourage new challengers, the bank intends to use deposits from savers to fund loans to car buyers.

As many as 23 other firms are thought to be considering making formal applications to have a banking licence, needed for any institution wanting to take deposits.

The government is keen to encourage competition on the high street for the "big four" of Barclays, HSBC, Lloyds Banking Group and Royal Bank of Scotland. But Paragon does not intend to launch current accounts – the main battle ground on the high street – and will not have branches or cash machines. It will initially focus on lending for cars before branching out into other specialist areas of consumer financing. Small business products may follow.

Will this give them access to the BoE? Or do they already have that as things stand?

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http://www.theguardian.com/business/2014/feb/18/paragon-buy-to-let-banking-licence-car-market

Will this give them access to the BoE? Or do they already have that as things stand?

To get access to discount window there's other criteria outside of just having backing license. Also not site they're 100% set in stone and may be at discretion of BoE as to uf they let you. I think you're meant to have diverse business operations for starters, and that is pretty subjective. The whole banking license/discount window area is very politically driven.

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http://www.theguardian.com/business/2014/feb/18/paragon-buy-to-let-banking-licence-car-market

Will this give them access to the BoE? Or do they already have that as things stand?

Only banks are eligible. However they need good collateral. A group of car loans at a very severe haircut might be eligible, but I doubt the BoE would like it very much - they are rather picky.

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Only banks are eligible. However they need good collateral. A group of car loans at a very severe haircut might be eligible, but I doubt the BoE would like it very much - they are rather picky.

Yeah, they only give money away to honest companies laugh.gif

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1. Rent your house

2. Rent your car

3. Rent your education

4. Rent your iphone

Can you see what it is yet?

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1. Rent your house

2. Rent your car

3. Rent your education

4. Rent your iphone

Can you see what it is yet?

im not sure...what is it exactly you feel we are ENTITLED to?

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1. Rent your house

2. Rent your car

3. Rent your education

4. Rent your iphone

Can you see what it is yet?

.. you'll be charged for use of the NHS when born. A charge will be taken against your internal organs... Behind on your liver repayments sir?

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1. Rent your house

2. Rent your car

3. Rent your education

4. Rent your iphone

Can you see what it is yet?

I don't mind renting capital provided the value proposition is good. I don't want to have to buy an airplane every time I'm going on holiday or buy a restaurant every time I want to eat out. It's childish to expect to own everything you touch. Frankly I'd be quite happy to own less. If it was possible to rent houses with a full set of furniture, crockery, lighting, bedding etc I'd certainly be interested. If the only possessions I had to think about were clothing and other personal effects I'd hardly ever have to do boring things like buy lampshades or phone plumbers.

The problem comes when the value proposition of renting is poor, especially if it is so poor that it prevents you from accumulating capital yourself.

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Shall we all apply for a banking license ?

I though exactly the same, why shouldn't we also be allowed to create money out of thin air and live off the interest that other people have to pay us on this made up 'money'?

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I don't mind renting capital provided the value proposition is good. I don't want to have to buy an airplane every time I'm going on holiday or buy a restaurant every time I want to eat out. It's childish to expect to own everything you touch. Frankly I'd be quite happy to own less. If it was possible to rent houses with a full set of furniture, crockery, lighting, bedding etc I'd certainly be interested. If the only possessions I had to think about were clothing and other personal effects I'd hardly ever have to do boring things like buy lampshades or phone plumbers.

The problem comes when the value proposition of renting is poor, especially if it is so poor that it prevents you from accumulating capital yourself.

If it wasn't poor, it wouldn't exist (boats, airplanes and occasional use capital equipment excepted for obvious reasons)

Btw, I agree with you re accumulating excess personal possessions. Owning fewer/sharing is def the way to go.

Edited by R K

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