Numerous loan providers in the UK are struggling to stay in business. The main problem affecting many of them is the lack of wholesale funds with which to offer loans. Many of the firms that built their businesses on the back of bad credit lending have found their market has disappeared. The other major change has been the clamp down on the selling of loan payment protection insurance. Revenue from the sale of these insurance policies was a major income source for many loan providers and now that the area is more highly regulated, their business models just don't stack up.

Customers may welcome the closure of some of the more peripheral lenders who targetted borrowers with poor credit histories and charged higher rates of interest, but the fact that the number of providers is getting smaller will ultimately reduce competition and leave the main banks with a easier market in the longer term.

In early July 2008 the big secured loans provider Firstplus announced it would no longer be offering new loans. The lender is owned by Barlcays and became high profile through it's TV advertising campaigns for debt consolidation loans. It says it has almost 130,000 loans customers and will stay in business to service those people while not arranging any new loans.

Other loan providers to close or stop arranging new loans include Picture, Easy Loans and Black and White Loans.

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