GE, Ready To Lend

The words “sub-prime” and “credit crunch” continue to worry everyone from economists to consumers across much of the Western world, but as the dust begins to settle on a year of economic upheaval GE Money Home Lending (GEMHL) reports that in the world of timeshare business continues to thrive.

The property markets of the US and Spain have no doubt been very much at the centre of events over the past 12 months with residential property prices falling up to 15% and as much as 7% respectively. The market for timeshare however remains steady with business in each of these markets remaining at the levels seen in 2007.

Jon Baker, Sales Director for GE Money Home Lending explains, “Time poor Brits continue to see holidays as
an important part of their lifestyle and expenditure and as part of this timeshare is often considered recession-resistant, if not completely recession-proof – because of this we believe there is still a real opportunity to market timeshare as a holiday ownership concept to Britons.

“In fact we’ve seen research from high street lender Abbey that indicates that for more than one in 10 of us, quality holiday time remains our biggest financial priority. The facilities and overall quality of resorts we’re seeing introduced to the timeshare market and the flexibility of locations continue to act as a draw to those considering buying into holiday ownership concepts. The feedback that we receive is that these resorts represent much higher value than your average packaged holiday and this isn’t something we see changing in the short term.”

Jon comments: “For those people who view their holiday time as a financial priority, timeshare continues to represent an effective way to guard against inflation, particularly now when we’re going through a period a real inflationary pressure.

GE’s unique lending ability
Since GE Money began offering tailored products for the holiday ownership and timeshare industry to British residents over 20 years ago, they have helped more than 200,000 customers finance in excess of £1 billion in holiday ownership products. GEMHL’s ability to finance this level of lending comes from its position as part of one of the world’s largest companies and their AAA credit rating.

Jon comments: “The second mortgage lending market has been hit hard by the credit crunch. In recent years thousands of Britons have taken second mortgages to finance lifestyle purchases such as timeshare but now that mortgage lending is more difficult to come by consumers have to look elsewhere. GEMHL has been in these markets through several economic cycles and has a long history in timeshare lending. We’re therefore
in an extremely strong position to continue providing a finance facility for our clients, whatever happens in the global markets.”

Finding a finance partner
Taking a partnership approach to lending, the way GEMHL operates has a number of very significant benefits. Whether you’re based on the Costa Del Sol or Orlando it’s important to be able to pick
up the phone to an account manager dedicated to you and your organisation.

In many cases the key to a successful sale is a close working relationship with your finance partner. Following contact on a day-to-day basis, salespeople know that when they pick up the phone their account manager will have all the experience and industry knowledge to help them offer their customers the right package for their particular needs.

By taking a partner like GEMHL salespeople are also able to undergo product training meaning that when they’re asked about the product terms and conditions which most customers are interested in they’ll
have the details to hand.

Funding at speed
One of the biggest challenges facing salespeople is time. If they are not able to close a deal quickly then the chances are that they will not be able to close it at all. For this reason it is important that your chosen finance partner is able to move just as quickly as you. Unsecured lending is far more time efficient than secured and choosing a finance partner like GEMHL who are able to offer such products means that salespeople will have a decision for customers in minutes. Today applications for finance can be processed online cutting out much of the time consuming paper work, but should an issue arise you should
be able to speak to your account manager in the UK 7days a week. Once the application has been accepted a loan agreement is printed out in your sales office for your customer to sign and following the cooling off period, payments are then processed quickly, releasing funds for your product the next day. This process has the added benefit that the risk for the loan lies solely with the lender and not with the client.

GEMHL have found speed of application processing to be the one of the single most important issues for our clients and the business is set up in such a way to be able to move this process at a pace which aids the sale.

Tailoring products to customers Choice plays a huge part in making customers feel that they’re being offered a deal that is right for them and by having a range of finance options available to you, choice is what you can give them. Loans should be flexible, offering 100% finance and a range of terms from 12 to 180 months means that customers are able to plan their finances appropriately when considering buying a timeshare product. Affordability remains the single most important issue for customers and it is crucial that they are offered a loan with a transparent minimum monthly repayment, plus the opportunity to make additional repayments when it suits them in order to reduce the outstanding balance.

Promotional products are a great tool for the client and offer the customer a period with which they can settle the loan without interest or charges. It’s vital that this type of product is designed with the client and customer in mind, ensuring that subsidies are kept to a minimum and customers are offered competitive APRs with a range of repayment terms that ensure the payments are affordable. At GEMHL our buy now pay later product does just that.

GEMHL takes the approach that it’s best to keep products simple. The client should feel comfortable that they are offering the customer a product that suits their needs now and in the future.

If timeshare is to continue to build the confidence of the UK consumer then GEMHL believes that it is important to partner with a finance provider that takes a transparent, straight-forward approach to its finance products which consumers won’t look back on as having strings attached.

The future of the timeshare market
GEMHL continues to see demand for timeshare from Brits across Florida and Europe, but believes that there is a great deal of untapped market potential from other nationalities. The UK market dominates Europe hugely, with over 500,000 of Europe’s 1.5 million plus timeshare owners coming from the UK.

Jon comments: “It’s no coincidence that the market that has the greatest access to finance for timeshare is also the market that dominates this sector. There’s an important step for our industry to take in identifying new markets where this approach will work equally as well as it currently does in the UK.

“The feedback we receive from our clients is that they’re increasingly seeing an interest in timeshare amongst Spanish, Russian, Germans, Italians and other nationalities from European countries who at present have fewer options when it comes to finance for timeshare. At GEMHL we think that there is an opportunity to provide products for people across Europe and the move into this market will be pivotal to the future success of any finance company.

With economic uncertainty and fiscal gloom dominating the headlines, it’s important to realise that some things in life – like finding the time to relax – will always prevail. As long as families continue to prioritise holidays in their budgets, timeshare will represent a cost-effective, increasingly high quality option over package deals. And with many of the promotional and flexible deals offered by GEMHL, as well as the certainty in its lending policies, there are plenty of reasons to view the timeshare market as an excellent opportunity.

About GE Money Home Lending:

With assets in excess of £15billion, GE Money Home Lending is a one of the UK’s leading specialist lenders.
Through its First National and igroup brands it offers a range specialist mortgages and flexible unsecured loans for the home improvement and holiday ownership markets.

GE Money Home Lending’s products are sold through a national network of carefully selected and accredited
intermediaries, including packagers, mortgage brokers, credit brokers and independent financial advisers.

Branded lending is a major part of GE Money Home Lending’s distribution strategy and it currently has over 17 key partnerships, which include, TMT, PINK, and Optoma.

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