As the credit crisis has seen the loan market shrink, specialist lenders have maintained pre-recession lending levels, giving consumer access to much needed credit, but it can cost them dearly.

As the big lenders have struggled to secure credit and lending figures have plummeted, specialist lenders have managed to maintain their business levels, if loan company S&U’s interim results are anything to go by.

Commenting on the fact that S&U has reported an almost unchanged loan book of £75million, David Kuo, director at financial website The Motley Fool, said: “When the going gets tough, the tough get going,” with S&U leaving traditional banks behind.

Mainstream banks have been slashing credit limits and taking loans off the shelves, reserving the best loan deals for borrowers with spotless credit reports, and leaving everyone else out in the cold.

While the high street banks and big lenders have seen their cash flow dry up, S&U, which trades at Loansathome4U and Advantage Finance Limited, has increased its cash flow and bank balance.

But this firm’s success in riding out the recession lies in its provision of expensive credit to consumers, what The Motely Fool deems “much-needed credit lifelines”, charging as much as 399 per cent interest.

The credit crisis has left consumers desperate as traditional lines of credit have dried up, making them vulnerable to alternative sources of borrowing.

“The sustained growth at S&U demonstrates an appetite for credit from consumers. However, forking out for expensive loans to solve short-term needs could cause long-term problems not only for anxious consumers but for the economy too,” Mr Kuo continued.

“The fact that some borrowers are prepared to pay as much as 399% interest shows just how desperate they are.”

Despite the risks attached to expensive debt, which can lead borrowers down a slippery slope where they are unable to repay it, Mr Kuo adds that “until such time that high street lenders stop cherry-picking the best customers, we can thank goodness for specialist lenders.”

© Fair Investment Company Ltd