LOAN company Amigo is a step closer to securing its future after creditors overwhelmingly backed a scheme to cap compensation in mis-selling cases.

The guarantor lender, which employs around 200 people at its Bournemouth base, has been seeking a way to deal with the crippling cost of complaints.

A previous scheme to limit payouts was rejected by the High Court last year after the Financial Conduct Authority (FCA) objected.

Amigo, which suspended all lending during the pandemic, has repeatedly warned it would go into administration if it could not get a ‘scheme of arrangement’ approved. Amigo Holdings said its New Business Scheme, designed to save the company and get it lending again, had received 145,532 votes, 88.8 per cent of those taking part, in favour, with 18,401 against.

When weighed by the value of creditors’ claims, the vote in favour represented £459.5million, or 90 per cent.

An alternative ‘wind down’ scheme, which would be carried out if the preferred scheme was not approved, received 134,77 votes in favour, or 83.1 per cent, representing £411.8m or 81.7 per cent by value.

A court hearing is due to be held on May 23-24.

Amigo chief executive Gary Jennison said: "Our customers have voted in favour of the New Business Scheme, which the board of Amigo believes offers the maximum possible redress to creditors. This is an important step to address the liabilities that arose from historic lending practices under previous management.

"However, the New Business Scheme still needs to be sanctioned by the court, and a significantly dilutive equity issue is needed to fund the scheme and to recapitalise the ongoing business given the requirements of the schemes for the transfer of virtually all existing assets to the redress creditors.

"We would like to thank all those customers who took the time to make their voices heard, as well as the FCA who confirmed last month there has been a significant improvement in the scheme terms compared with Amigo's first scheme.

“The approval of the scheme will deliver the best possible outcome for creditors, and Amigo's proposed return to lending will allow us to play an important role in the non-standard lending sector, at a time of unprecedented rising living costs."

Amigo was built on lending money at an annual percentage rate of 49.9 per cent to people with a poor credit history who could find a friend or relative to act as guarantor.

It ran into conflict with regulators and has not been offering new loans since 2020.