THE boss of Bournemouth loan business Amigo says it will be a “changed company” after it revealed it has been given permission to lend money again.

The company has not offered any loans since November 2020 and has been dealing with a flood of complaints from customers who say they were mis-sold its products.

Earlier this year, it won High Court approval for a scheme to limit compensation in mis-selling cases so it could continue trading. It had warned it would go into administration if no scheme was approved.

Amigo – which employs around 200 people at its Commercial Road HQ – intends to return to lending under a new brand name, RewardRate, with incentives for borrowers who keep up a good payment record.

Amigo Holdings announced on Thursday evening that it had received approval from the Financial Conduct Authority (FCA) to return to lending under agreed conditions.

It will initially be allowed to operate a pilot lending scheme, which will limit the level of new loans issued for at least two months.

Amigo chief executive Danny Malone said: "We return to lending with FCA approval as a changed company in terms of our values and the way we operate with a focus on supporting financial inclusion and mobility for customers.

“Our new RewardRate product set has been designed with this in mind and once the trial phase is complete, we believe it will be an important new entrant to the mid-cost regulated market.

"A successful pilot will also move us a step closer to paying out compensation to redress creditors under the terms of the court-sanctioned scheme of arrangement. Together with our advisers we are working hard on meeting the final condition, namely a successful capital raise by May 2023."

Amigo said it would carry out testing of “customer outcomes”, led by a third party, during the initial two-month pilot lending phase and a required assessment period.

If the FCA is satisfied with the outcomes, Amigo will still be limited to a maximum of £35million in new lending until at least £15m is paid into the scheme of arrangement to compensate past customers.

RewardRate will offer a loan product starting at 39.9 per cent annual percentage rate (APR) for customers who can find a friend or relative to guarantee the payments, as well as a non-guarantor, unsecured loan starting at 49.9 per cent APR.

Amigo is expecting to propose a capital raise of around £40m, including an issue of 19 new shares for each existing share. It will also raise debt to support future growth.