Monday, May 7, 2012

Struggling firms offered cash from company that will lend you £7,500 for 1 year and you pay £15,675 Back

A payday loan firm which charges interest rates of 4,200APR or more was at the centre of a storm today after launching a service for hard-up small businesses.

Experts said the move represents a stark reflection of the crisis created by banks refusing to lend to small firms.

Wonga.com has extended its controversial short-term loan scheme, launched in October 2007, to Britain’s businesses.

As of today, a company boss can apply for a loan of up to £10,000 from Wonga for Business and receive the money as soon as 15 minutes later.

But the costs are crippling. If a high-risk business wanted to borrow £7,500 for a year, the interest costs of £7,800 would be higher than the original loan. Read More