Project Lollipop Management Presentation Vfinal

Project Lollipop
Management Presentation
January 2017
Strictly private and confidential
Agenda
1 Executive Summary 6 Portfolio
2 Business Overview & Market 7 Financials
3 Origination and Underwriting 8 Funding
4 Collections 9 Timetable and logistics
5 Regulation and IT 10 Proposed Data Provision
2
1. Executive Summary
Executive Summary
Introduction
• 1st Stop is a diversified and rapidly growing consumer lender with a differentiated approach
• We specialise in underwriting consumers who are under-served by the high street
• Today our three key markets are Home Loans, Car Finance and Personal Lending, where we can generate premium risk adjusted returns
Loan Book Growth

£m
90 84
Loan book growth of 80 94% 76

over 2x in 18 months CAGR
70 67
60 55
Driven by origination
growth in all 3 core 50 45
markets 37
40
30
Able to scale using
proven model 20
10
0
June 2015 September 2015 December 2015 March 2016 June 2016 September 2016
4
Note: Figures include Conister loans and trial Tenant Personal Product
Executive Summary
Our customers
• 1st Stop serves near prime customers with ability and willingness to repay, but whom are unable to access Prime credit products
Limited 1st Stop Customer – “Near prime”

Prime Near-prime Sub-prime
Access
Typical profile • Middle-aged, budgeting families
100% • Young singles with limited
commitments
90% • Pre-retirement budgeting households
Typical • Low/Mid level employees on full or part
80% employment time contracts
• Regular self employed
70% • Income £20,000 - £30,000 p.a.
Typical APR
60% Credit profile • Applicant with some historic issues on

credit file (e.g. missed mortgage or
50% utilities payments, older defaults or
court judgements)
40% • Younger person with limited credit
history
30%
Borrowing • £3,000 - £20,000 requirement
20% need • Typically for debt consolidation, home
improvements, one-off events, car for
10% travelling to work
Typical APR • 30%
0%
UK Population
5
Executive Summary
Our differentiation
Detailed Underwriting Excellent Risk-Adjusted

Returns
Application Process • Prime and Sub-Prime lenders rely on

automated processes for underwriting,
Manual ID Checks leaving gaps in the market for
experienced specialists able to price for
Credit Report risk more effectively Attractive APRs
Telephone Interviews • 1st Stop uses technology to filter Low Bad Debt Rates
customers, followed by detailed
underwriting processes developed
Original Payslips
through decades of experience to find
customers that are good credit prospects,
Original Bank Statements
but have been unable to access
mainstream credit
Affordability Assessment
• This process allows us to offer customers
Loan Close Telephone Call rates lower than available to them in the
sub-prime market, whilst maintaining low
Manual Pay-out delinquency rates
6
Executive Summary
Opportunity
Overview Loan book
Discontinued Conister
• The business plan forecasts the loan book increasing to Car finance Home loans
£212m by 2020 Personal Average monthly originations
250 12
• This is supported by current originations of £5.2m per
month which is forecast to increase to £10m per month by
2020
10
• The growth is underpinned by proven origination channels, 200
stringent underwriting criteria and robust collections
Average Monthly Originations (£m)

34%
procedures CAGR
8
• Investment in the business infrastructure and the
Loan book (£m)

150
experienced team positions 1st Stop well for continued
future expansion
6
• Pollen Street Capital have provided additional equity capital

to support future growth 100
4
Opportunity
• The businesses growth trajectory has resulted in the 50

opportunity to support 1st Stop Group by participation in a 2
Syndicated Senior Revolving Credit Facility of £75m;
secured on the loan books of the business
0
FY16 FY17 FY18 FY19 FY20
7
Stated figures includes trial Personal Tenant product
2. Business Overview & Market
Senior Management Team
A talented, experienced and ambitious management team
ALEX MOLLART DAVID ENRIGHT MARK ROBINS

Chief Executive Officer Chief Operations Officer Chief Financial Officer
• Initially founded 1st Stop as a lender in • Joined the 1st Stop Group in May 2010 to • Joined the 1st Stop Group in April 2016
2009 establish the 1st Stop Car Finance division • Over 30 years of experience in a range of
• Responsible for working with funding • Over 29 years of industry experience sectors including consumer financial
Partners (includes Banks and Specialist including senior positions at services within corporate, privately backed
Finance Houses) and developing product and SME environments in the UK and
▬ Welcome Car Finance (historically
lines to facilitate more lending in the Europe
one of the largest non-prime funders
chosen space
of cars in the UK) ▬ The Richmond Group (Amigo Loans)
• Over 20 years’ industry experience ▬ Altala Group Limited
▬ Welcome:- Operations, Established
including holding a number of senior ▬ Barclaycard
broker division, ran HP & HI divisions
positions within ▬ FirstPlus Financial
▬ Shopacheck – Reg Director
▬ Welcome Financial Services operations
▬ Dial 4 A Loan
LINDSEY MCMURRAY MATTHEW POTTER PHILIP GEORGE

Pollen Street Capital Pollen Street Capital Shawbrook
(Director of 1st Stop) (Director of 1st Stop) (Pending) Non Exec Director
• Managing Partner, founded PSC in 2013 • Partner at PSC Managing Director, Business Development at
Shawbrook
• Has been a private equity investor for more than 15 • Has spent the last five years focused on originating
years with a particular focus on the Financial and executing deals in the financial services and • Prior to Shawbrook, Philip was Managing Director
Services sector healthcare sectors of Commercial First Mortgages since 2003
9
Key milestones
An established and successful specialist lender - perfectly positioned for further growth
The business Well placed to grow as the economy Entered into forward Grew the total loan book 1st Stop Recoveries,
commenced lending as recovered. New loan applications arrangement with Conister to £53.5m by December sold to simplify the
a core focus. Initially exceeded 100,000 per month Bank 2015 (including Conister) corporate structure
focused on secured
and payday loans Introduced £10m 2nd Lien Monthly originations
facility exceed £5m
Senior credit facility FCA licences approved

agreed with Shawbrook for all businesses
2009 2010 2011 2012 2013 2014 2015 2016
Introduction of Home
Withdrew from the Improvement Loans
payday loan market trial in October 2015
Received equity funding from Pollen

Street Capital on 25 May 2016
Refinanced 2nd Lien facility,

increased block financing by £10m,
Opened Car Finance Doubled lending and made Shawbrook senior increased to £20m
businesses to meet the significant investment into staff, Opened the personal
demands of consumers processes and compliance unsecured loans business New additions to senior management
10
Customers and Products – Car Finance
Delivering volume, through multiple markets at attractive margins
Loan book1
Car finance Average monthly originations
Product Dynamics Typical Customer 100 4.5
Average monthly Originations (£m)

• Loan Amounts: £2,000 - £15,000 • 37 years old 4.0
80 3.5
Loan book (£m)

• Term Range: 12 – 60 Months • Average monthly salary of £1.7k 3.0
60
2.5
• Monthly Range: 1.32% – 2.97% • Credit score of 511 2.0
40
1.5
• Secured on Vehicle • Buying a used car that is typically 4-7
20 1.0
years old (average 6.6 years) 0.5
0.0
Car Security
Average Loan Loan Book • All Car Finance loans are documented as Hire Purchase
• £6,535 loan for 53 months • 48% of current loan book Agreements
• £486 acceptance fee • The vehicle remains the property of 1st Stop Car Finance
• 43% of FY20 loan book
until the customer has made all contractual payments on
• The monthly interest rate for this customer the loan
• £40m total balance outstanding
is 2.01% charged on £6,535
• Average origination balance of £7.0k
• The monthly repayments for the customer
will be £201, in total they will repay £10,681
11
1Note: Graph does not include Conister loans, Figures as at December 2016
Market overview – Car Finance
Car Finance market dynamics
Car Finance contracts sold through dealerships
Overview
(£bn, private sector)
● The Car Finance market has performed well in recent years with double- 45
40.2
digit growth for all but one year since 2010 40 38.2
35.9
● Much of the buoyancy of the market can be linked to the recovery of the car 33.8
35 31.0
market with sales rising in both the new and used sectors following a 30 28.3
difficult period during the 2008-09 economic slowdown 24.7
25 20.8
● Outperformance of Car Finance (130% growth since 2010) relative to total
20 16.7
car sales (88% growth since 2010) suggest that an increasing proportion of 13.6
15 12.3
car buyers are using finance to fund the purchase of a car
10
● The average advance has also been increasing. As of 2015 it stood at 2010 2011 2012 2013 2014 2015 2016F 2017F 2018F 2019F 2020F
£13,289 compared to £10,890 in 2010 – an increase of 22%
● Finance contracts for used cars represent a larger market than for new cars Car Finance contracts
by number of contracts, with a 54% (used) vs. 46% (new) split in 2015. (new vs. used cars by value )
100%
However, by value of these contracts the new car market is larger with 57%
compared to 43% for used vehicles in 2015 80% 44% 42% 43% 43%
48% 49%
● The penetration level of financing contracts for new cars has increased to 60%
81% in 2015 compared to only 52% in 2010. This has been supported by
falling interest rates since 2010, making Car Finance an increasingly 40%
attractive alternative for buyers. However, penetration level for used cars 52% 51% 56% 58% 57% 57%
remains low (c.16% in 2015) due to the greater number of private sellers, 20%
the lower vehicle price, and a narrower range of financing options. This
0%
represents a large potential opportunity for 1st Stop 2010 2011 2012 2013 2014 2015
New cars Used cars
Market landscape:
High end prime Near prime Sub prime

Managements view
12
Source: Mintel, FLA
Customers and Products – Home Loans
Loan book1
Home loans Average monthly originations

• 80
Loan Amounts: £2,000 - £50,000 • 42 years old 3.0
70
2.5
Loan book (£m)

• Term Range: 24 – 240 Months • Homeowner 60
50 2.0
• Monthly Range: 0.95% – 2.21% • LTV of 80% 40 1.5
30
1.0
• Secured on Property • Average monthly salary of £2.4K 20
10 0.5
• Credit score of 522 0.0
Unilateral Notice - Home Loans

Average Loan Loan Book • Registration via a unilateral notice means that a charge has
• £12,090 loan for 104 months • 32% of current loan book
been signed and a note is included in the charges register to
state the interest in the property
• £1,746 of acceptance fees (Capitalised on • 38% of FY20 loan book
day1) • Registration of loan security via a unilateral notice does not
require the consent of the relevant proprietor or a registered
• £27m total balance outstanding charge (unlike a full charge)
• The monthly interest rate for this customer
is 1.74% charged on £12,090 • Average origination balance of £13.8k • The enforcement of a unilateral notice upon repossession
requires the consent of the first charge holder, however,
• The monthly repayments for the customer repossession is not 1st Stop’s primary form of recovery and, like
will be £254, in total they will repay a full charge, the unilateral notice entitles 1st Stop to priority
£26,437 proceeds upon sale of the underlying property
13
1Note: Graph does not include Conister loans, Figures as at December 2016
Market overview – Home Loans
Secured lending market
Second charge gross lending
Market overview 1,000
844
● Market supply was hit hard during the crisis as traditional providers and
high street banks retrenched from non-core activities. This resulted in the 800
market falling from a high of £6bn in 2007, to just £280m in 2010 597
600
● Since the financial crisis, the market has recovered well with a CAGR of
(£m)
445
25% from 2010 – 2015. The second charge market is now well placed for
significant further growth driven by the compelling underlying 400 326
277 286
macroeconomic drivers and the continued increases in UK house prices
200
● Key market drivers include:
▬ Consumers preferring to take out a second charge loan, rather than 0
upset (often favourable) terms of existing first charge 2010 2011 2012 2013 2014 2015
▬ Benign risk conditions (repossessions reached a 7-year low in 2015) Source: FLA - Second Charge Industry reports
and attractive yields (c.8-10% average) resulting in new market entrants
Comparison of secured lending products
▬ Strong growth in house prices (particularly SE) raising available equity
to support new lending available in the UK market
▬ Increasing loan size, albeit volumes have also improved
● Post crisis there has been a systematic shift in the market approach with
underwriting criteria, customer diligence and affordability calculations now
much more detailed. This has resulted in:
Lending rates
▬ A more affluent customer profile
▬ Improved arrears performance with the total % of loans entering arrears
during the first 12 months falling by over 20% from the pre crisis market
to post crisis market (’08-’12)
● There continues to be strong drivers for the market, the most prominent
being the implementation of the European Mortgage Credit Directive which
has improved awareness and is expected to result in more 1st charge
brokers including this in their offering to consumers
<60% 70% 75% 80% >85%
Managements view LTV
14
Source: FLA – Second Charge Industry reports, FCA implementation of the Mortgage credit directive and the new regime for second charge mortgages
Customers and Products – Personal Loans
Loan book1
Personal Average monthly originations

40
• Loan Amounts: £2,000 - £15,000 • 39 years old, 2.0
35
Loan book (£m)

• Term Range: 24 – 72 Months 30
• Homeowner 1.5
25
• Monthly Range: 1.32% – 3.44% • Average monthly salary of £2.1k 20
1.0
15
• Unsecured • Credit score of 536 10 0.5
5
0.0
Average Loan Loan Book

• £5,853 loan for 57 months
• 19% of current loan book
• £336 acceptance fee (Acceptance fees
• 19% of FY20 loan book
capitalised upfront)
• £14m total balance outstanding
• The monthly interest rate for this customer
is 1.76% charged on £5,853
• Average origination balance of £6.1k
• The monthly repayments for the customer
will be £173, in total they will repay £9,853
15
Note: Graph does not include Conister loans, Figures as at December 2016, Stated figures exclude trial Personal Tenant product
Market overview – Personal Loans
Personal unsecured credit market
Comparison of unsecured lending products available in the UK
UK non-standard unsecured credit
market
● There has been strong demand in the non-standard space which has 175
attracted a number of new entrants to the UK market, such as Avant
1st Stop is well
● Personal consumer lending has been boosted by low interest rates
positioned to
and low unemployment together with gains in real earnings, even
increase monthly
though the increase in nominal wages has been relatively weak 150
originations in the
● Consumer demand for Personal Loans does not currently appear to Personal Loans
being met, particularly in the near-prime segment. This presents a business through
significant opportunity for lenders such as 1st Stop to serve this increasing current
demand 125 market share
100
Lending rates
Gross lending – unsecured Personal Loans
(£bn)
40
35 75
32
30 27
50
21
20
15
Higher value
25 lenders target
10 prime end of the
market with lower
APRs
0 0
2011 2012 2013 2014 2015
0.0£1k £3k 0.5 >£5k 1.0
Source: Mintel, Bank of England, FLA, BBA Managements view Loan size
16
Team Structure Chart
An industry leading team and motivated employee base of over 100 FTEs
Alex Mollart David Enright Mark Robins
Chief Chief Chief

Executive Operational Financial
Officer Officer Officer
Board
Lindsay Matthew Philip George
McMurray Potter
(Pending)
Pollen Street Pollen Street Non Exec -
Capital Capital Shawbrook
Danielle Steve Beard Debbie Mike Taylor

Justin Daniel Pass
Hawksworth Peterson
Rawlinson Operations Senior
Operations Management
Chief Technology Director Director of Human
Director of Director
Head of Finance Officer (Home and Resources, Training
Compliance (Car Finance)
Personal) and Administration
1st Stop Home

Loans Limited Human Resources &
Compliance & Finance and Information 22 FTEs Training 1st Stop Car
Audit accounting Technology 2 FTEs Limited
5 FTEs 3 FTEs 14 FTEs 1st Stop Personal 28 FTEs
Loans Limited Administration
19 FTEs 4 FTEs
17
Pollen Street invested in the business in 2016
Significant investment in infrastructure positions the business for future growth
The recent investment in the business has resulted in enhancements to the 1st Stop Group:
• New CFO, New CTO, New Compliance Director

Management Team • Additions to Board of Directors
• Increased finance function, focus on improving business MI, recently

converted to FRS 102 accounting standards
Finance, Technology & Compliance • Additional focus on data analytics
• Additional focus on risk and compliance
• Data Warehouse and Credit Analytics

Data & Analytics • New IT Strategy
• Recently hired a new analytics specialist
• Upgrade to best-in-class processes and documentation

Compliance & Regulation • Expansion of Compliance team
1st Stop is an entrepreneurial business which is becoming institutionalised and more focused on data analysis
18
Corporate Structure
Current corporate financial structure for the 1st Stop Group
PSC Nominee 3
Alex Mollart David Enright
Limited
50% 40% 10%
1st Stop Holdings Limited Preference Shares
100%
• Blackpool head
office
1st Stop Group Limited • Support staff (Inc.
directors & finance)
100%
Underwriting entities
1st Stop Car 1st Stop Personal 1st Stop Home 1st Stop Funding 1st Stop Reserve
Dormant entities
Finance Limited Loans Limited Loans Limited Limited Limited
Mezzanine funding 1st Stop Options

Loan book3: £40.6m Loan book3: £14.3m Loan book3: £27.1m HNW funding SPV
SPV Limited
Revenue2: £5.8m Revenue2: £2.6m Revenue2: £6.4m
Net Income2: £4.3m Net Income2: £2.0m Net Income2: £3.8m
1st Stop Loans
Net assets1: £1.2m Net assets1: (£0.3m) Net assets1: £1.2m
Limited
FTEs1: 29 FTEs1: 21 FTEs1: 24
Based in Durham Based in Blackpool Based in Blackpool
1st Stop Debt
Management Limited
Senior and Block funding
19
1 As at end of October 2016, 2 Calculated for LTM till October 2016, 3Loan book as at December 2016 (excludes trial Personal Tenant product)
3. Origination and Underwriting
Process Overview
The customer journey is embedded into the operations of the business
Origination Underwriting Packaging Approval Funding Welcome Relationship and

servicing
 Hotkeys received  Applications  30 days of bank  Employment  Pre-funding  Confirmation of  Dedicated contact
from brokers individually statements for checks solicitation call loan terms
 On-going relationship
assessed Home Loans
 Decision Engine  Approval  Confirmation of
 Pro-active
filters online  Detailed income  Investigatory verification funds
forbearance
applications and expenditure interview
assessment for
 Manual
Home and
underwriting
Personal
checks
customers
21
Origination
Client leads are predominantly sourced from a well established network of brokers
Car Finance (2016) Home Loan (2016) Personal Loan (2016)

Direct, 2% Direct, 2% Renewal, Direct,
12% 6% Renewal,
1%
Brokers,
Brokers, 87% Brokers,
98% 93%
Total Origination Split Total Origination Split Total Origination Split

(Car Finance) - £m (Home Loan) - £m (Personal Loan) - £m
Broker Direct 27.6 Broker Direct Renewal
Millions
Millions
Millions
30 20 18.0 Broker Direct Renewal
15 12.9
19.3 15 13.3
20 10
10 5.8
9.0 6.2
10 5
5
0.6
- - -
2014 2015 2016 2014 2015 2016 2014 2015 2016
Car Finance – Top 5 brokers Home Loan – Top 5 brokers Personal Loan – Top 5 brokers
1. Evolution Funding (21%) 1. Fluent Money (24%) 1. Freedom Finance (25%)
2. Car Finance 247 (15%) 2. Norton Finance (10%) 2. Money Supermarket (17%)
3. Kennah Motor Credit (8%) 3. Gopher Money (8%) 3. Totally Money (15%)
4. Scotsdale finance (6%) 4. Knight and Co (8%) 4. Uswitch (7%)
5. LUV financial solutions (5%) 5. Freedom Finance (6%) 5. Fluent Loans (6%)
22
Top 5 over the period: (2016 Jan - Dec), stated figures exclude trial Personal Tenant product
Broker Origination
1st Stop has a network of over 130 active brokers
On-boarding process
● Broker relationships are subject to on-boarding checks including:
● Initial site visit
● FCA authorisation checks
● Credit Safe business review
● On-site training prior to (and presence during) the “go live” period
Lead generation
● 1st Stop Group has established a presence with the larger brokers in the Home and Personal Loans space and with national motor dealerships in Car Finance
● The 1st Stop Group’s Home loans business writes c.£1.5m of loans per month from c.20 brokers whilst the Car Finance business writes c.£2.6m per month
from c.30 brokers and Personal Loans business writes c.£800k per month from 15 brokers
● As a result of enlarged scale, solid reputation and increased funding capacity, The 1st Stop Group is starting to gain a presence with the larger brokers (e.g.
Money Supermarket) in the Home and Personal Loans space and with national motor dealerships (e.g. Arnold Clark) in Car Finance
● The 1st Stop Group is also increasingly seeing new business sourced from self generated applications and renewals
● Significant excess capacity and scope remains within the 1st Stop Group to obtain new leads through both direct and broker channels and to fund and service
these loans
Relationship management with brokers

● 1st Stop perform regular site visits & training (this is at least monthly with their Top 5 brokers)
● Brokers have a dedicated resource as appropriate
● 1st Stop perform a monthly review of broker performance
23
Lending criteria
Each product has a tailored risk and pricing matrix
Key differences between the products

● Each division takes its own underwriting approach based on market dynamics of its market
● Home Loan plans offer a maximum loan of £50,000 compared to lower amounts offered via Personal Loan and Car Finance
● While the maximum age allowed at the end of loan is 65 years for Personal Loans it is 67 years for Car Finance and 70 years for Home Loans
● The unsecured nature of Personal Loans results in a more stringent underwrite for customer and a more thorough review of the applicant’s credit file is performed
to ensure no credit deterioration, including:
▬ Minimum net monthly income criteria
▬ Stricter minimum disposable income calculations
▬ Increase in the minimum credit score for Personal Loans to 450 (it is 400 for Home Loans)
Car Finance
Cars Tier 1 Tier 2 Tier 3 Tier 4 Tier 5
Loan Criteria
Minimum advance £2000
Maximum advance £15,000 £12,000 £10,000 £8,000 £7,000
Minimum age 22 years old
Maximum age 64 years old (67 years old at end of agreement)
Minimum deposit £0
Maximum loan term 60 month (up to 5yr old) otherwise 48 month
Minimum net earned income 25% net income
Flat rate 8% / 10% 14% pa 16% pa 18% pa 20% pa
Vehicle Criteria (For passenger cars)
Maximum loan to value:
115% GGR
Glasses guide retail transacted value
Maximum vehicle mileage:
100,000
At start of the agreement
Maximum vehicle age:
12 years old
At end of the agreement:
24
Note: Bikes and Caravans represent <4% of the ‘Car Finance’ book and each have a different matrix
Lending criteria
Underwriting matrix’s are reviewed on a regular basis
Secured Home Loans
Product Information 1 2 3 4 5 6
Net advance £5,000 - £10,000 £5,000 - £15,000 £5,000 - £20,000 £5,001 - £25,000 £25,001 - £35,000 £35,001 - £50,000
Acceptance fee £795 £995 £1,295
Distribution fee 10%
Agreement terms 24 – 120 months 24 – 180 months 24 – 240 months
Maximum LTV 120% 100% 90% 85% 80%
Rate to Risk Profile Monthly rate / Annual rate
Tier 0 - 600+ 1.25% / 15.0% 1.00% / 12.0% 1.00% / 12.0%
Tier 1 - 580-599 1.50% / 18.0% 1.25% / 15.0% 1.25% / 15.0%
Tier 2 - 560-579 1.75% / 21.0% 1.50% / 18.0% 1.50% / 18.0%
Tier 3 - 540-559 2.00% / 24.0% 1.65% / 19.8% 1.50% / 18.0% 1.50% / 18.0%
Tier 4 - 520-539 2.15% / 25.8% 1.75% / 21.0% 1.50% / 18.0% 1.50% / 18.0%
Tier 5 - 500-519 2.25% / 27.0% 2.00% / 24.0% 1.75% / 21.0% 1.75% / 21.0%
Tier 6 – 499 and below 2.50% / 30.0% Not available Not available
Minimum scores 400 450 500
Criteria
Residential status Owner Occupier / Non Occupier
Locations UK
Minimum house valuation £75,000
Age ranges Aged 21 to 70 (at end of loan)
Time in employment Outside of probation period
Employment status Employed & self employed (SA302 or accounts required) Employed
Maximum number of legal
2 2 (More than 20k = 1 charge) 1
charges
Charges registered Unilateral notice Consent required
Shared ownership Allowed Not available
Conduct not worsening (last
MTG / SEC history 1 in 3 months 1 in 6 months
payment cannot be missed)
MTG / SEC arrears Considered
IVA’s / Bankruptcy Must be satisfied None allowed
DM plans Must be settled by loan and must have paid 6 months payments
Recent defaults considered,
Unsecured credit history defaults under £500 Considered
excluded
DTI 60% 50%
Affordability Income and expenditure
Free cash £100 £150 £200 £300
Hometrack Full Valuation (5 or above / 4 with Hometrack Full Valuation (5 or above) or Drive by
Valuation Pre Val Minimum Drive by Valuation
comparable) Valuation
25
Lending criteria
Underwriting matrix’s are reviewed on a regular basis
Personal Loans
Product Information Homeowner
1 2 3 4
Net advance £2000 - £5000 £5001 - £8000 £8001 - £10000 £10001 - £15000
Distribution fee 7.5%
Agreement terms 24-60 Months 24-72 Months
Rate to Risk Profile (Credit score based) Monthly rate
Tier 1 > 584 0.65%
Tier 2 - 560-584 0.85%
Tier 3 - 525-559 1.00%
Tier 4 - 510-524 1.42%
Tier 5 - 450-509 1.76%
Personal General Criteria
Residential status Owner occupier's only & owner non occupiers only
Locations England, Wales, Scotland
Age ranges Aged 21 to 65 (at end of loan)
Creditworthiness
Total amount of outstanding unsecured credit <£30000
Affordability
Minimum net monthly income >£1099 >£1399 >£1699
Affordability assessment Must pass affordability I+E
Free cash £200 £300
26
Note: We have not included the Tenant product underwriting criteria as the product is no longer underwritten (Tenant represents less than 1.5% of the loan book)
Decision engine
1st Stops decision engine allows for efficient initial review of eligibility
1 Decision Engine (75% of total applications are declined at this stage)
Matching Business Call Credit Product

Rules Rules Rules Allocation
Third Party service

Rules around basic criteria
establishing the customer’s
Identifying existing or information which is gathered at
creditworthiness through Call Products are allocated at this
previous point of application, prior to any
Credits scorecards and stage based on several factors
applicants/customers third-party searches being carried
assessing the overall conduct of
out
active and settled credit facilities
Example rule areas: Example rule areas: Example rule areas: Example rule areas:
• Previous decline within last • Age restrictions: • Min. credit score of 400 • Gauge score, LTV, LTI, income
30 Days • 22 and 67 for Car Finance, 21 • No bankruptcy, IVA, trust deed or levels, unsecured debt levels,
• Previous decline and 70 for Home Loan and 21 sequestration order employment status, residential
• Previous applicant and 65 for Personal Loans • Restrictions around status
• Existing/ previous customer • Must be UK resident ▬ thin files Car Finance loans:
• Must provide a contact • Employment status ▬ DM accounts • <=115% of the Glasses retail
telephone number and • Minimum income ▬ worsening arrears price
minimum of one other form of • Postcode restrictions (e.g. ▬ mortgage conduct • must be bought from a dealer
communication Mainland UK – Not Islands) ▬ CCJ’s and DFN’s • <=100,000 miles at the start of
• Homeowners only for Home and ▬ debt collections agency the agreement
Personal searches • <=12 years at the end of the
agreement
27
Manual underwriting process
A proven, robust underwriting process supported by an established servicing function
2 Manual underwriting (23% of total applications are rejected through underwriting)
Affordability assessments Customer calls:

Home Loans: ● Underwriters call each customer when writing a loan. The call is a
detailed process undertaken to assess the reliability of the information
● A full income and expenditure assessment is completed through a phone call provided by the customer
for all Home customers by both 1st Stop and packagers. Declarations are
verified with reference to appropriate documentation (e.g. bank statement, ● Calls to customers on average last c.30 minutes and longer if required
wage slips etc) ● Underwriters utilise call credit reports and discuss a number of factors
● The income and expenditure calculation submitted to 1st Stop is checked and including:
re-calculated through the review of bank statements ● The history of the customers previous loans including the
Personal Loans: reasons for any defaults
● For Personal Loans a Call Credit affordability report is used in the first ● Current loans the customer has and the reasons why they have
instance to verify affordability and employment. If any potential issues are been taken out
highlighted then further documentation such as bank statements and wage ● The intended use of the potential 1st Stop loan
slips are requested from the client to verify affordability
● The customers current employment situation (and historical
● Employment is also verified through job referencing. When free cash after situation if relevant)
loan is expected to be less than £200 this should be discussed with the client
● Bank statements are obtained and expenses are discussed if
Car loans required. For example if expenses are not in line with the
● An assessment of income is carried out & verified. Affordability is linked to income and expenditure reviews
income and a full Income and Expenditure review is carried out as
appropriate. 30 days of bank statements are required for Tier 5 products Other checks:
● The customer’s monthly instalment is limited to a maximum of 25% of the ● Proof of residency and employment is obtained
customer’s net monthly pay
● Valuation support for Home and Car
2% of total applications to 1st Stop are written
28
Note: 23% includes those customers who reject loans offered
Approval and Funding
Final process before funding a loan
Approval
There are multiple levels of loan authorisations ranging from underwriters through to directors
Reasons which may require a higher authorization level include:
● Income types available; e.g. additional approval required to accept maternity pay, paid via cash / cheques
● Length of employment
● Self employment
● Size of loan requested
● Credit score of applicant
Funding
The following conditions should be fulfilled for release of funds even after the loan is approved:
● Residency confirmation
● Receipt of recent bank statement for Home Loans
● All customers are subject to a final call from the collections team to summarise T&Cs and explain the consequences of non-payment. The collection team
maintains discretion over final decision to accept loan
● There is a final documentation review performed by a mandated individual (i.e. team or operations managers) before funding
● Funding is authorised at the final documentation review stage with actual payment of funding carried out by group services
29
4. Collections
Collections Process Map
Collections processes follow detailed communication procedures
Added Agreements NOD issued ‘Ongoing arrears’
Daly Workflow
2 FCP or Yes
more in
arrears?
Between
>£10 and
<2FCP?
Failed Payment
(Arrears > £10) Day 1 Day 4 Day 7 Day 10 Day 12 Day 14 Day 16 Day 18 Day 21 Day 22 Day 24 Day 26 Day 28 Day 30 Day 45 Day 60
Manual
Call Call Call Call Call Call Call Call Call Call Call Call Call Call Call Call
Calls
Arrears Arrears DCA Arrears Arrears Arrears Arrears

Letter Letter Letter Letter Letter Letter Letter
Automated Arrears Arrears DCA Arrears Arrears Arrears Arrears

Communications Email Email Email Email Email Email Email
General Arrears General Arrears Arrears Arrears Arrears

SMS SMS SMS SMS SMS SMS SMS
31
Arrears
Processes to manage arrears and collections were updated during 2016
Arrears Management: Documentation Process

Each product line (Car, Home, Personal) has its own dedicated collections team: ● All calls must be made on company landlines and recorded
● The servicing and collections processes have been designed to be fully compliant ● All written correspondence to document arrears and
with, and exceed, the standards set out by the FCA in the Consumer Credit discussions with customers is recorded on file
Sourcebook (“CONC”) and with the principle of Treating Customers Fairly
● Written correspondence (including regulatory notices etc)
● Arrears reports are created daily to help chase collections has recently been reviewed by Walker Morris
● Payment methods allowed include: Direct Debits (DD), standing orders, bank
transfers, cash, cheques, card payments and Continuous Payment Authority (CPA’s)
● Cash is collected as a single monthly payment by DD. The collection date varies
throughout the month by customer as it is aligned to the customer’s payday
● The customers of the 1st Stop Group are proactively managed by the CRM team
throughout their loans to ensure strong customer engagement. Measures taken
include:
Recent Trends
- the initial verification call to establish rapport;
● During 2016 1st Stop changed their collection procedures to
- payment reminders sent out by text and/or email; and
ensure they remained best in class and compliant within a
- should a DD request fail, the customer’s account is automatically added to a changing regulatory environment. The period of procedural
manual collections queue with the CRM team making direct contact to rearrange change led to increased levels of arrears as the business
payment (including via cash or debit card) rather than waiting for the DD to be implemented new policies and associated training
represented
● These revised processes have now been successfully
● This proactive management of the customer results in an effective collection process implemented. The impact of the updated procedures is
beginning to show through in the overall arrears levels
which are expected to stabilise and trend down towards to
historic levels
32
Recovery process
Processes to manage arrears and collections were updated during 2016
Underperforming loans Process for recoveries

● The recovery process is managed by the collection and litigation team
of c.25 people Attempt repossession
and send to auction (Car
● The CRM team make regular assessments of customers’ current only)
circumstances. Likewise when a payment is missed the CRM team
All products
enquire as to the reasons CRM
team Apply for
Issue
● Should any indication of financial difficulty be noted, and the customer attempt
default attachment Account
co-operates, the Group’s process for forbearance is implemented (e.g. to
notice of earnings written off
establish
work to find an acceptable minimum payment, accept token payments contact
for a reasonable period etc.)
Continue to
● In some cases where a customer cannot be found the Group may
work in
utilise a tracing agency (Hillside, Callcredit, Taylor Hall, Writs, Swift house
etc) to try to locate the customer in order to re-establish a relationship
via the CRM team
● Although the Group’s policies permit the sale of outstanding loans to
Debt Collection Agencies, the in house collection team is sufficiently
effective and this route is not currently utilised Point of missed 60 days of 90 days of 120 days of <1 full monthly
payment non payment non payment non payment payment in 8
Process for recovery months
● The process for recovery of capital by the 1st Stop Group is largely
consistent across the business with some minor differences by product
● Legal action / court orders are enforced when a Car Finance loans
defaults but legal action is not usually enforced for Home and Personal
Loans
● The litigation process was previously performed by 1st Stop Recoveries
(which has since been sold). This process has been re-introduced in
house during the last quarter of 2016
33
Note: this diagram represents the process going forward
Provisioning Policy & Write Off Process
The group is implementing a roll rate provisioning policy
Provision Policy
● The current provisioning policy is being amended to create a specific provision against loans in arrears
● The new provisioning policy will apply a percentage provision to loans in arrears. The percentage applied is different based upon:
1. The type of loan (Home, Car or Personal); and
2. The number of months the loan has been in arrears
● Accounts will be written off when either:
1. A full contractual payment has not been received over the previous 8 months or,
2. There is evidence that the account will transition directly through to write-off e.g. deceased account, bankruptcy
● The provision levels used will be set and monitored by the Group Credit & Pricing Committee and any change will be reported to the Board. This level of
oversight will help to avoid any distortions which are expected to be rectified in the short term
Methodology Draft provision rates (at November 2016)

● At each month end the business undertakes roll rate analysis <= 1 <= 2 <= 3 <=4 <=5 <=6 6+
over the most recent 3 month rolling period to estimate the Down Down Down Down Down Down Down
likelihood of a loan defaulting based on the historic charge-offs of Home Loans 2.50% 15% 35% 45% 60% 65% 75%
the book
Car Finance 2.50% 15% 25% 40% 50% 60% 80%
● This enables the business to calculate the probability of loans
currently in arrears flowing through to charge off based on actual Personal Loans 20% 30% 40% 50% 60% 70% 85%
historical performance
● The provision rates are then applied to loans in arrears on a loan
Gross provision position (till September 2016)
by loan bases to calculate the bad debt provision
Reported (Current) Specific Basis
● This figure will move on a monthly basis in line with the
performance of the loan book and will act as a reference point for Home Loans 589,146 582,766
the actual provision utilised
Car Finance 781,830 737,283
Personal Loans 464,693 788,828
Total 1,835,668 2,108,877
34
Note: This policy is still subject to Board approval
5. Regulation and IT
Regulation and compliance
A robust system of controls has been embedded throughout the organisation
Regulatory team:
Bespoke compliance system
1st Stop have a bespoke 1st and 2nd line of defence system which:
Board
● Has a built in Quality Assurance (QA) scorecard to assess customer calls
and files in all operational departments
Risk & ● Information stored on the system includes QA grade, areas for
Audit
compliance improvement, justification for grade and any remedial action required
committee
committee
● Each individual completed QA assessment can be accessed by managers
to provide real time feedback and remedial action
Danielle Hawksworth
● MI can be pulled to complete the following:
Director of Compliance
● View QA results (per individual/department/business)
• Joined 1st Stop in 2016 ● View Remedial Actions
• Previously a FS Regulatory specialist at ● Conduct Trend Analysis – common Issues/ improvements/

Deliotte differences over a period of 1-3+ months
• Over 7 years of financial services ● Complete Check the Checker/ Audits

experience including holding a number of ● Individual employee data can be automatically pulled into one to one
Risk positions within Santander documents to effectively manage performance
Compliance Compliance
Risk
Monitoring Advise
Manager
Manager Manager
Compliance Compliance
Advice Monitoring
Assistant Assistant
36
Three lines of defence approach to regulatory compliance
Responsibility Description
• Front line employees understand their roles and responsibilities Board

• Business • Operate set of policies and controls to ensure activities remain within the
Governance
First Line management is board risk appetite
Committees
responsible for the • Provides management assurance by identifying risks and business
of identification and improvement, implementing controls, and reporting on progress
Defence assessment of risks and • An open, transparent and rigorous approach to risk embedded in the DNA of
controls the business • Develop a
• Comprehensive MI pack facilitates management of the business clearly defined
Strategy
• Risk committees, • Determine risk

• Combination of a watchdog and trusted advisor; policing risk appetite and appetite
together with the risk
adherence to policy
function team
• Provides independent oversight of the risk management activities and controls • Approve policy
Second responsible for:
of the 1st Line of Defence following
completeness and
Line of • Sets the boundaries by drafting and implementing policies and procedures rigorous
accuracy or risk
• Ensuring compliance and providing assurance oversight for the Board
Defence assessments; risk
• Providing guidance and direction for implementing policies and for their proper
process
reporting and the
execution • Make decisions
adequacy of risk
• Strategic direction to the development of risk aligned to the business strategy
mitigation plans
• Receive
updates and
• Internal Compliance reports to
and Audit provides ensure the
• Performs periodic testing of procedures including file and call sample testing
independent and Group remains
• To provide independent, objective assurance and consulting activities
Third Line objective assurance on
• Reviews first line adherence to policies and controls
within its risk
the robustness of the appetite
of • Conducts independent evaluations of the risk management, governance and
risk management
control framework
Defence framework and the
• Ensures that risk management arrangements and structures are appropriate
• Deeply
appropriateness and experienced
and are discharging their roles and responsibilities completely and accurately
effectiveness of internal
controls
37
A robust system of controls has been embedded throughout the organisation
Three lines of defence approach to regulatory compliance Regulatory framework
supported by: ● FCA: The 1st Stop Group, in line with all companies undertaking consumer
● A dedicated internal audit team of five people plus a line manager perform credit activity in the UK, is regulated by the FCA. It’s underwriting entities are
compliance and controls testing. They undertake random sampling of fully authorised by the FCA
underwriting files and 3 – 4 collections calls per agent per month. ● MCD: The 1st Stop Group is fully MCD compliant
● The Board has ultimate responsibility for overseeing risk management,
setting the tone and influencing the culture and maintaining a sound
system of internal controls. In particular the Board: Fraud
- monitors the management of fundamental risks through review of the ● Instances of fraud are minimal across the group. The 1st Stop Group has
Strategic Risk Register on a monthly basis; clearly defined policies and procedures in place to mitigate and deal with
- satisfies itself that the appropriate control is in place and operating disputes and fraud matters
effectively; and
- Annually reviews the approach to risk management ● The last instance of fraud was an organised crime ring which impacted Car
Finance (c.£30k impact). A fraudulent company & website was set up, which
● External support from: was fully registered with FCA. The impact on the wider car finance industry
- Deloitte performs an additional internal audit role performing periodic was c.£580k.
reviews of systems and the controls environment ● To prevent this happening again 1st Stop have implemented a number of
- Grant Thornton are retained by Shawbrook to undertake a quarterly checks including a minimum of 12 months trading history required for any
review of financial controls and a bi-annual compliance review new dealers. In addition an action group has been set up with other lenders
- The Conister group performs periodic reviews of the compliance and so that they can alert one another on active fraud rings
control environment
- The block funders each require periodic testing of assets (e.g. ● There have been 2 instances of fraud which affected the business in the last
verification of underlying documentation etc.) 12 months
- An external compliance consultant, provides advice on compliance
and risk management framework
Complaints
● Each employee undertakes a programme of continual monthly training ● 1st Stop received 47 complaints in the last 3 months to November 2016 via
with annual mandatory modules to ensure all staff understand their roles Call, Post, Email and Web Service
and knowledge of regulatory, compliance, customer and technical matters
is refreshed ● Of which only 7 have currently been upheld and only 1 has been escalated to
FOS
● Reasons for complaints include (but are not limited to); customers being
unhappy with being declined for a loan and the length of the process
38
IT Overview
1st Stop uses robust Anchor & Sentinel IT systems
IT Team: IT Systems:
Board
Daniel Pass
Chief Technology Officer
• Joined 1st Stop in 2016

• Previously the Group technical director at
Betfred
• Over 10 years of IT experience including
holding a number of positions within:
▬ Cable & Wireless
▬ Pipex
HL/PL Tech
BIT PM HP/RC BA
Head of IT BA Blackpool Implementer
Blackpool North East
Blackpool
IT
HL/PL Tech.
Implementer HP/RC BA MI Manager MI Developer
Implementer
North East
IT Service 2nd Line IT

MI IT Service
Desk Infrastructure
Technician Desk Analyst
Manager Engineer
39
IT Systems - Overall Architecture
1st Stop has a robust IT infrastructure
Hosted CRM system provided by Anchor Computer In-house maintenance

Systems
● IT and systems are managed in house by a dedicated team of 9
● Robust industry lending platform provider used by over 200 employees
companies in UK, Ireland, Guernsey, Jersey and Australia. ISO
certified 9001 and 14001 ● This team is supported by an outsourced provider as necessary
● Anchor Loan CRM system to manage lead acquisition, ● The critical IT systems used within the business are subject to
underwriting, account management and collections for personal continuous improvement. Weekly meetings with the end users
and Home loans and the Business Improvement Team drive process and system
enhancements to meet new client requirements for service
● Car Finance also uses the DealTrak123 brokerage system for lead delivery and ease of use
acquisition and underwriting in the Car Finance business
Business Continuity and Disaster Recovery plans are Investment in the IT architecture:
implemented and subject to periodic testing ● The business intends to continue its improvement of IT
● Documented plans are effective and implemented for business infrastructure to help automate processes and further increase
continuity and disaster recovery efficiency
● The plan is tested throughout the year and in June 2016 a full dry ● The IT and telecoms OpEx budget for FY17 is c.£400k. This is to
run test was completed which consisted of both a walkthrough of allow management to continue improving the operational
the DR plan and a simulation exercise efficiency of the IT infrastructure
● The databases have well defined backup routines which mitigate ● Management have also budgeted for improvement projects and
the risk of major loss of data the annual development support
40
6. Portfolio
Portfolio overview
The portfolio is increasing by 5% a month (Average originations of £4.6m per month)
90 7
£m
£m
85
83
82
80
80 77
Loan Capital 74 6
Monthly originations 70
70 66
65
61 5
60 57
53
51
4
50 47
44
41
39
40
36 3
35
33
30
2
20
1
10
0 -
The decline in origination volumes from May to October 2016 is due to the business ceasing to underwrite the trial Personal Loan ‘Tenant’ product, combined
with a prolonged seasonal impact in Car Finance which has since recovered
42
Stated figures includes trial Personal Tenant product
Existing Portfolio – All products
All Products
Loan term (in months)

Current Loan Portfolio
● £85m Loan Portfolio comprising of 11,788 live loans 1%
5% <=24m
● The weighted average monthly interest rate is 1.9%
13% 25m-48m
● The weighted average customer credit score is 519 30%
49m-72m
● The weighted average monthly income is £1,999 5%
73m-96m
● The weighted average age of clients is 39 years old 97m-120m
● The weighted average LTV of Home Loans is 80% 121m+
45%
Product split
Loan size segmentation Credit score
Outstanding Number of
Product type % % Not Available 0.1%
Balance (£) loans 50k-80k 0%
650-700 0.2%
30k-50k 1%
Car Finance 40,620,220 50% 7,014 60% 600-650 1.9%
25k-30k 3%
550-600 18.4%
20k-25k 7%
Home Loan 27,141,722 33% 2,110 18% 525-550 23.0%
15k-20k 11%
500-525 32.2%
Personal Loan 13,078,560 16% 2,364 20% 10k-15k 21%
450-500 18.3%
5k-10k 47%
400-450 5.5%
Home Improvement 1,219,774 1% 300 3% <5k 9%
<400 0.4%
0% 10% 20% 30% 40% 50%
Total 82,060,275 100% 11,788 100% 0% 10% 20% 30% 40%
43
Stated figures exclude trial Personal Tenant product
Recent origination analysis – All products
All Products
Key Trends New Advances by Balance and Avg. Advance - recent

origination
● Monthly originations have risen to over £5m per month in 2016
Hire Purchase Home Improvement Home Loan
● The average loan advance has remained broadly flat at c.£7k
Personal Loan Average advance (£k)
● The recent slight reduction in credit score is as a result of the changing
7 10
product mix. Recently Car Finance has written higher yield, lower score
Average advance £k
Millions
tiered products coupled with the relative increase in Car Finance business 6
8
5
LTV (%) & Credit score 6
4
WA LTV (Home loan) WA Credit score
100% 550 3 4
80%
500 2
60%
2
40% 1
450
20%
0% 400 - 0
Monthly interest rate (%) vs Average Term

% Originations by Product
WA Nominal Interest Rate WA Term
2.40% 90 100%
2.30% 80
2.20% 70 80%
2.10% 60 60%
2.00% 50
1.90% 40 40%
1.80% 30
1.70% 20 20%
1.60% 10 0%
1.50% -
44
Stated figures exclude trial Personal Tenant product
Existing Portfolio – Car Finance Loans
Car Finance only

0% 1%
● The weighted average customer credit score is 511
<24m
● The weighted average monthly income is £1,679 25m-48m
● The weighted average age of clients is 37 years old 46% 49m-72m
53% 73m+
● Currently 7,014 live loans in the portfolio with £40m outstanding balance
Monthly Salary (£) Nominal interest rate Loan size segmentation Credit score
segmentation
3.5k+ 1.7% Not Available 0.1%
15k-20k 0.4%
3k-3.5k 2.0% 2.5+ 7.3% 650-700 0.0%
600-650 0.2%
2.5k-3k 5.1%
2-2.5 46.5% 10k-15k 16.0% 550-600 8.5%
2k-2.5k 12.7%
525-550 22.2%
1.5k-2k 31.4% 1.5-2 40.1%
5k-10k 73.0% 500-525 43.7%
1k-1.5k 44.6%
1-1.5 5.8% 450-500 19.9%
0.5k-1k 0.8% 400-450 5.3%
<5k 10.6%
<0.5k 1.7%
<1 0.2%
<400 0.1%
0% 20% 40% 60% 0% 20% 40% 60% 0% 20% 40% 60% 80% 0% 20% 40% 60%
45
Recent origination analysis - Car Finance Loans -
Car Finance only

origination
● Monthly originations have risen to over £2.5m per month in 2016
Hire Purchase Average advance (£k)
● The average loan advance has increased marginally towards £7k
3.5 8
Average advance £k
●
Millions
The average term of loans has increased to 53 months
3.0
6
2.5
Credit Score Analysis
525 2.0
520 4
515 1.5
510
505 1.0
500 2
495
490 0.5
485
0.0 0
Monthly interest rate (%) Average term (months)

2.30% 54
2.20% 53
2.10% 52
2.00% 51
1.90% 50
1.80% 49
46
Existing Portfolio – Home Loans
Home Loan only

0%
2% 6%
● The weighted average customer credit score is 522 13% <=24m
26m-48m
● The weighted average monthly income is £2,382
24% 49m-72m
● Currently 2,110 live loans in the portfolio with £27m outstanding balance 97m-120m
39%
● The weighted average LTV of Home Loans is 80% 121m-144m
16%
145m+
● Good geographical split with no region representing >16%
Spread of LTV Nominal interest rate Loan size segmentation (£) Credit score
segmentation (%)
150+ 0.3% 50k-80k 0.2% 600+ 4.6%
Not Available 0.0%
30k-50k 4.0% 550-600 22.4%
100-150 12.6%
3+ 0.3% 25k-30k 9.8%
525-550 20.9%
87.5-100 29.9% 2.5-3 7.7% 20k-25k 21.3%
500-525 22.9%
2-2.5 21.9% 15k-20k 25.1%
75-87.5 27.1%
450-500 21.4%
1.5-2 38.3% 10k-15k 26.9%
50-75 18.6%
1-1.5 27.4% 5k-10k 11.6% 400-450 7.0%
<50 11.5% <1 4.4% <5k 1.1% <400 0.8%
0% 10% 20% 30% 40% 0% 10% 20% 30% 40% 50% 0% 10% 20% 30% 0% 10% 20% 30%
47
Recent origination analysis - Home Loans
Home Loan only

origination
● As the business has introduced more attractive pricing tiers for better
Home Loan Average advance (£k)
quality customers this has resulted in the average credit score
increasing, but is offset by a reduction in the monthly interest rate 2.0 20
£m
● Better quality customer also seek greater loan amounts and tenors,
Average advance £k
which is contributing to the respective increases in those metrics 16
1.5
LTV (%) & Credit Score

12
WA LTV WA Credit score
1.0
100% 550
90% 540 8
80% 530
70% 520 0.5
60% 510 4
50% 500
40% 490
30% 480 0.0 0

3.00% 130
2.75%
2.50% 110
2.25%
90
2.00%
1.75% 70
1.50%
1.25% 50
48
Existing Portfolio – Personal Loans
Personal Loan only

● The weighted average monthly interest rate is 1.76% 3%
● The weighted average customer credit score is 536 5%

<=24m
● The weighted average monthly income is £2,179
25m-48m
29%
● Currently 2,664 live loans in the portfolio with £14m outstanding balance 73m+
62%
Monthly Salary (£) Nominal interest rate Loan size segmentation Credit score
segmentation
3.5k+ 6.8% Not Available 0.4%
Not Available 0.0% 15k+ 14.6%
3k-3.5k 5.5% 600+ 2.4%
4+ 0.1%
2.5k-3k 13.7% 3.5-4 1.1% 550-600 39.1%
10k-15k 25.1%
2k-2.5k 25.5% 3-3.5 2.9% 525-550 29.2%
1.5k-2k 32.7%
2.5-3 4.9%
500-525 17.0%
2-2.5 19.3% 5k-10k 40.6%
1k-1.5k 15.5% 450-500 8.1%
1.5-2 35.8%
0.5k-1k 0.3% 1-1.5 34.4% 400-450 3.1%
<5k 19.7%
<0.5k 0.1% <1 1.6% <400 0.8%
0% 10% 20% 30% 40% 0% 10% 20% 30% 40% 0% 20% 40% 60% 0% 20% 40% 60%
49
Stated figures exclude trial Personal Tenant product and include the Home Improvement product
Recent origination analysis - Personal Loans
Personal Loan only
New Advances by Balance and Avg. Advance - recent

Key Trends origination
● Monthly originations have risen to over £1.0m per month in 2016 and Personal Loan Average advance (£k)
peaked at over £1.6m in 2016 1.8 8
Millions
●
Average advance £k
The average loan advance increased slightly towards £5.5k 1.6 7
1.4
6
1.2
5
Credit Score Analysis 1.0
4
WA Credit score 0.8
3
600 0.6
2
500 0.4
400 0.2 1
300 0.0 0

4.50% 90
4.00% 80
3.50%
70
3.00%
60
2.50%
2.00% 50
1.50% 40
50
Arrears and collections – All Products
Arrears as a percentage of the total principle balance
Car arrears over time

Key Trends 30 to 90 days 90 to 180 days
● During 2016 1st Stop changed their collection procedures to ensure 4.0%
they remained best in class and compliant within a changing 3.0%
regulatory environment. The period of procedural change led to 2.0%
increased levels of arrears as the business implemented new policies 1.0%
and associated training
0.0%
Jul-14
Jul-15
Jul-16
Jun-14
Nov-14
Dec-14
Jan-15
Jun-15
Nov-15
Dec-15
Jan-16
Jun-16
Nov-16
Apr-14
Oct-14
May-14
Aug-14
Sep-14
Apr-15
Oct-15
Apr-16
Feb-15
Mar-15
May-15
Aug-15
Sep-15
Feb-16
Mar-16
May-16
Aug-16
Sep-16
Oct-16
● These revised processes have now been successfully implemented.
The impact of the updated procedures is beginning to show through
in the overall arrears levels which are expected to stabilise and trend
down towards to historic levels Home arrears over time
30 to 90 days 90 to 180 days
Total book arrears over time 2.5%

2.0%
30 to 90 days 90 to 180 days 1.5%
1.0%
3.0% 0.5%
0.0%
Jul-14
Jul-15
Jul-16
Jun-14
Jan-15
Jun-15
Jan-16
Jun-16
Aug-14
Sep-14
Aug-15
Sep-15
Aug-16
Sep-16
Apr-14
Oct-14
Nov-14
Dec-14
Feb-15
Mar-15
Apr-15
Oct-15
Nov-15
Dec-15
Feb-16
Mar-16
Apr-16
Oct-16
Nov-16
May-14
May-15
May-16
2.5%
2.0%
Personal arrears over time
1.5%
30 to 90 days 90 to 180 days
1.0% 4.0%
3.0%
0.5% 2.0%
1.0%
0.0% 0.0%
Jul-14
Jul-15
Jul-16
Jun-14
Dec-14
Jan-15
Jun-15
Nov-15
Dec-15
Jan-16
Jun-16
Nov-16
Apr-14
Aug-14
Sep-14
Oct-14
Nov-14
Apr-15
Aug-15
Sep-15
Oct-15
Apr-16
Aug-16
Sep-16
Oct-16
May-14
Feb-15
Mar-15
May-15
Feb-16
Mar-16
May-16
Jul-14
Jul-15
Jul-16
Jun-14
Dec-14
Jan-15
Jun-15
Nov-15
Dec-15
Jan-16
Jun-16
Apr-14
Aug-14
Sep-14
Oct-14
Nov-14
Apr-15
Aug-15
Sep-15
Oct-15
Apr-16
Aug-16
Sep-16
Oct-16
Nov-16
May-14
Feb-15
Mar-15
May-15
Feb-16
Mar-16
May-16
51
Defaults - Car Finance
Cumulative defaults by annual cohort (3 month default)
Principle Cumulative
Car Finance Year balance default Default %
20%
2012 1,082,362 77,970 3.7%
18% 2013 2,119,599 278,538 4.9%
16%
2014 5,654,585 689,827 6.2%
2015 11,080,361 1,150,491 5.9%

14%
12% ● The recent increase in defaults is mainly as a result

of changes in collections process (see pg. 51)
10% ● There have been a number of improvements to
collections introduced Q4 2016:
8% ● New collections manager (incumbent on

sick leave)
● Revised collections practices implemented
6%
● Recruitment & upskilling of collections team
4% ● Calculation: Cumulative defaulted loans (i.e. all
loans which have been 3 months or greater in
arrears) as a proportion of the original total net
2% outstanding balance. Plotted against months
elapsed since inception grouped by annual cohorts
0%
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61
2012 2013 2014 2015
52
Note: We have excluded cohorts with an original principle balance less than £1m
Recoveries & Prepayments – Car Finance
Car Finance only (3 month default)
● The recovery trend for the Car Finance loans
Post-Default Recoveries typically spikes due to the re-possession and
100% sale of the vehicle
90% ● 1st Stop have historically sold the outstanding
80% balance to 1st Stop Recoveries Ltd, a vehicle
70% that was sold out of the 1st Stop Group in 2016.
60% As such the subsequent cash flow after this
point in time cannot be shown. The red line
50%
marks the point that the curves flatten due to the
40% lack of data as a result of the sale.
30%
● Going forwards the business will retain all
20% collection activity in house and will continue to
10% pursue the customer for any outstanding
0% amounts payable not covered through the sale of
-10%
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 the vehicle, this is expected to result in higher
recoveries over time
2012 2013 2014 2015
● Recoveries are measured from the moment of
Note: Cumulative defaults on the 2012 cohort amount to <£20k and is not considered to be representative
default, as such where loans have defaulted in
recent months, the subsequent recoveries have
not be recorded (and will likely increase the front
Principal Balance reduction over time of the curve). This results in an artificially low
100% recoveries percentage for cohorts with recent
90% defaults, i.e. the most recent years, which will
80% improve over time
70%
60% ● The business has experienced strong
50% prepayments over time, c.25% CPR
40%
30% ● Loans are sometimes paid back faster than the
20% contractual term due to customers paying
10% weekly. Effectively taking an option available to
0% repay an additional monthly payment per year
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 e.g. over a 12 month period the equivalent of 13
monthly payments are made
2012 2013 2014 2015
53
VT Analysis – Car Finance
Car Finance only
Cash collection as a % of Opening Balance by Annual cohort
7%
● All Car Finance contracts qualify for
voluntary termination (“VT”) once
50% of the total amount repayable is
6% paid including any initial customer
deposit
● Historically VT cases have not been
recorded by the business, but this
5% will be captured going forwards
● To understand VT levels cash
collections was analysed on a
4% annual cohort basis
● If VT levels were high we would
expect to see a spike or increase in
cash collection % after month 20 i.e.
3% when a customer has repaid >50%
of the total amount payable
● The lack of prepayment spikes after
2% month 20 indicates that VT is not
significantly affecting the
prepayment levels
1%
0%
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61
2012 2013 2014 2015
54
Defaults – Home Loans
Principle Cumulative
Home Loans Year balance default Default %
15% 2010 1,948,320 229,830 11.8%
2011 2,111,306 156,621 7.4%
2012 2,880,227 199,254 6.9%
2013 4,543,186 288,459 6.3%
13%
2014 7,960,257 245,586 3.1%
2015 13,205,277 104,479 0.8%
11%
● 1st Stop have continually improved their underwriting
criteria, process and training since establishment, which
has resulted in improving default performance over time
9%
● The product and target customer has evolved and 1st
Stop have attracted a better profile of customer over
time (improvement in credit score pg. 48)
7%
● Headline terms have become more attractive to
introducers, allowing 1st Stop to access to better lead
sources
5%
● Fulfilling customers needs by offering larger loans and
more flexible terms has resulted in an increased
average advance pg. 48)
3%
● 1st stop are no longer just classed as a Second Charge
non-equity lender. The 1st Stop product range is
competitive with other Second Charge lenders
1%
● Calculation: Cumulative defaulted loans (i.e. all loans
which have been 6 months or greater in arrears) as a
1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 61 64 67 70 73 76 79 82 85 88 91 94 97 100103 proportion of the original total net outstanding balance.
-1% Plotted against months elapsed since inception grouped
2010 2011 2012 2013 2014 2015 2016 by annual cohorts
55
Note: We have excluded cohorts with an original principle balance less than £1m
Recoveries & Prepayments – Home Loans
Home Loan only (6 month default)
● The recovery trend for the Home Loans
Post-Default Recoveries often spikes due to the re-financing of a
50% loan or the sale of a property
45%
● 1st Stop have historically sold the
40% outstanding balance to 1st Stop
35% Recoveries Ltd, a vehicle that was sold
30% out of the 1st Stop Group in May 2016.
As such the subsequent cash flow after
25%
this point in time cannot be shown
20%
● Going forwards the business will retain all
15%
collection activity in house and will
10% continue to pursue the customer for any
5% outstanding amounts payable not covered
0% through the sale of the property, this is
1
3
5
7
9
11
13
15
17
19
21
23
25
27
29
31
33
35
37
39
41
43
45
47
49
51
53
55
57
59
61
63
65
67
69
71
73
75
77
79
81
83
85
87
89
91
93
95
97
99
101
103
105
expected to result in higher recoveries
2010 2011 2012 2013 2014 2015 2016 over time
● Recoveries are measured from the
moment of default, as such where loans
have defaulted in recent months, the
subsequent recoveries have not be
Principal Balance reduction over time
100%
recorded (and will likely increase the front
of the curve). This results in an artificially
90%
low recoveries percentage for cohorts
80%
with recent defaults, i.e. the most recent
70%
years, which will improve over time
60%
30% significantly reducing the average life of
20% the product
10%
0%
1
3
5
7
9
11
13
15
17
19
21
23
25
27
29
31
33
35
37
39
41
43
45
47
49
51
53
55
57
59
61
63
65
67
69
71
73
75
77
79
81
83
85
87
89
91
93
95
97
99
101
103
105
2010 2011 2012 2013 2014 2015 2016
56
Defaults – Personal Loans
Personal book (excluding Tenant)

Annual Defaults
15% Cumulative
Year Principle balance default Default %
2014 584,294 47,923 8.2%

13%
2015 6,369,454 155,939 2.4%
11%
9%
7%
5%
3%
1%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42
-1%
2014 2015
57
Recoveries & Prepayments – Personal Loans
Personal Loan only (6 month default)
● 1st Stop have historically sold the
Post-Default Recoveries outstanding balance to 1st Stop
10% Recoveries Ltd, a vehicle that was sold
9% out of the 1st Stop Group in May 2016.
8% As such the subsequent cash flow after
7% this point in time cannot be shown
6% ● Going forwards the business will retain
5% all collection activity in house and will
4% continue to pursue the customer for
3% any outstanding amounts payable, this
2% is expected to result in higher
1% recoveries over time
0%
● Recoveries are measured from the
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
moment of default, as such where
2014 2015 loans have defaulted in recent months,
the subsequent recoveries have not be
recorded (and will likely increase the
Principal Balance reduction over time front of the curve). This results in an
100% artificially low recoveries percentage
90% for cohorts with recent defaults, i.e. the
80% most recent years, which will improve
70% over time
60%
50%
40%
10%
0%
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61
2014 2015
58
7. Financials
Financials
Overview
CAGR
Loan book FY16A FY17F FY18F FY19F FY20F
(16 – 20)
Car Finance 11,952 27,727 52,803 72,832 87,952 64.7%
Home Loans 17,689 27,128 38,632 61,367 78,362 45.1%
Personal Loans 3,584 3,269 18,118 32,341 38,720 81.3%
Discontinued 2,259 0 0 0 0 nm
Conister 32,090 34,107 22,728 13,011 7,486 nm
Total Loan book 65,315 92,231 132,282 179,550 212,520 34.3%
Loan book
Discontinued Conister Car finance Home loans Personal Average monthly originations
250 12
10
Average Monthly Originations (£m)

200
8
Loan book (£m)
150
100
4
50
2
0
60
Note: Budget is indicative and not yet approved by the board, The discontinued loan book is that which was held in the 1 ST Stop Recoveries which was sold in FY16, Stated figures includes trial Personal Tenant product
Financials
Profit and loss (FRS 102)
CAGR
Profit and Loss (£000’s) FY16A FY17F FY18F FY19F FY20F
(16 – 20)
Interest income 8,869 15,395 22,189 31,358 38,796 44.6%
Fee income 810 702 349 239 297 nm
Other income 461 236 237 237 237 nm
Total income 10,140 16,333 22,775 31,833 39,329 40.3%
Financing costs (3,087) (5,447) (6,286) (7,321) (7,942) 26.7%
Impairment and w/o (960) (2,271) (3,329) (5,424) (6,351) 60.4%
Risk adjusted net income 6,094 8,616 13,160 19,089 25,036 42.4%
Underwriting costs (487) (721) (1,243) (1,634) (1,720) 37.1%
Staff costs (3,090) (4,063) (5,633) (6,768) (7,108) 23.2%
IT & Telecoms costs (344) (386) (466) (475) (484) 8.9%
Marketing costs (191) (136) (59) (61) (62) -24.4%
Legal & Prof fees (506) (831) (789) (813) (837) 13.4%
Group recharge (0) (0) 0 0 0 nm
Other overhead (770) (739) (874) (1,076) (1,218) 12.2%
Depreciation & Amortisation (224) (233) (244) (251) (259) 3.7%
Exceptional items 116 (3,340) - - - -100.0%
Exceptionals (Settlements) (463) - - - - -100.0%
Profit before tax 135 (1,833) 3,852 8,012 13,347 215.2%
Corporation tax charge 277 260 (850) (1,730) (2,817) nm
Dividends (984) (519) - - - -100.0%
Retained earnings (572) (2,092) 3,003 6,281 10,530 nm
61
Note: The budget is indicative and still to be approved by the board
Financials
Balance sheet (FRS 102)
CAGR
Balance Sheet (£000’s) FY16A FY17F FY18F FY19F FY20F
(16 – 20)
Assets 45,198 79,194 126,560 176,595 216,991 79%
Goodwill 69 66 22 - - n/m
Intangibles 40 - - - - n/m
Fixed assets 584 526 569 591 591 0.3%
Investments 250 253 253 253 253 n/m
Loan Book 33,225 58,124 109,553 166,540 205,034 57.6%
Debtors & Repayments 7,075 9,745 10,382 13,302 14,995 20.7%
Cash & Bank 3,955 10,480 5,781 (4,091) (3,882) Nm
Liabilities (45,148) (80,241) (124,604) (168,357) (198,222) nm

Senior Debt (11,000) (31,209) (73,003) (114,289) (141,662) 89.4%
2nd Lien Debt (10,000) (10,000) (10,000) (10,000) (10,000) 0%
Block Finance (7,956) (1,997) (1,154) (540) (132) nm
Reserve Funding (9,057) (7,309) (6,354) (3,412) (1,808) nm
Creditors & Accruals (5,975) (7,362) (9,594) (12,715) (14,545) 24.9%
Conister Loss pool (559) (667) (445) (258) (150) nm
Corporation Tax Payable 276 (37) (1,151) (2,309) (3,616) nm
Impairment Provision (820) (1,594) (2,837) (4,768) (6,243) 66.1%
Intercompany - (20,015) (20,015) (20,015) (20,015) nm
Deferred Tax (57) (51) (51) (51) (51) nm
Net assets 51 (1,047) 1,956 8,237 18,767 337.9%
62
Note: The budget is indicative and still to be approved by the board
Growth Strategy
Investment in systems and processes has left The 1st Stop Group positioned for
further growth
● Historically The 1st Stop Group has had to turn away new business due to liquidity constraints and not having a portal to interact with volume
introducers
● Following creation of robust platforms, management want to grow market share by capitalising on the demand for our products and services. This
will originate from:
1. Engaging with market leading volume brokers including; Moneysupermarket, Ocean Finance and Arnold Clark. In order to increase volumes
from existing, well established brokers
2. White labelling and affinity partnerships with well known banks and corporations
3. Leveraging knowledge of target customer base to access to new markets through product diversification (e.g. retail credit, Point Of Sale
(POS) finance and revolving credit);
4. Investment in advertising and Pay Per Click (“PPC”) campaigns, database marketing and existing customers
5. Consideration of loan portfolio acquisitions
6. Improved service for customers including faster on-boarding
63
8. Funding
Existing funding structure
Brief overview of the existing funding
Standby Servicer Key:
Debt funding
1st Stop Group Limited Selected entity debt funding
100%
Quarterly Audit Provider
1st Stop Car Finance 1st Stop Personal 1st Stop Home Loans 1st Stop Funding 1st Stop Reserve
Limited Loans Limited Limited Limited Limited
Various block Senior facility

Mezzanine facility
funding Conister funding HNWI funding
funding Funds all underwriting funding Funds all underwriting
Funds personal and
Funds Car Finance only Funds all underwriting
home only
Total drawn: £15.2m: Shawbrook: £15.3m Loan book of: £34.9m Honeycomb: £10m Total drawn: £8.3m:
Honeycomb: £7.5m £1m loan @ 31% may
Shawbrook £4.2m remain in place
Others £3.5m
65
Senior funding requirement
Brief overview of the funding requirements
1st Stop Group Limited
100%
1st Stop Car Finance 1st Stop Personal 1st Stop Home Loans 1st Stop Funding In run off
Limited Loans Limited Limited Limited 1st Stop Reserve Limited
Standby Servicer
Loans sold
Key: Mezzanine facility

Quarterly Audit Provider Debt funding Senior facility funding In run off
funding Funds all underwriting Conister funding
Selected entity debt funding Funds all underwriting
Sale of loans
66
Sensitivity Analysis
1st Stop have undertaken detailed analysis to ensure the funding structure is suitable
Overview:
Personal Loan Defaults
● 1st Stop have utilised a run-off model to simulate numerous stressed scenarios and
20%
support the suitability of its proposed funding structure 2014
● The model has been developed based on Fitch’s EMEA Consumer ABS Rating 15% 2015
Criteria, adjusted for the 1st Stop business model and data availability Base
10%
Assumptions:
5%
● Base case Defaults and Recoveries:
● Car Finance: 7% Defaults and 70% Recoveries 0%
1 6 11 16 21 26 31 36 41
● Home Loan: 8.2% Defaults and 25% Recoveries
● Personal: 12% Defaults and 0% Recoveries
Home Loan Defaults
● In all scenarios the underlying interest rate charged to customers has been stressed
down to the weighted average interest rate covenant levels of: 15% 2009 2010
2011 2012
● 1.9% for Car Finance and Personal Loans 2013 2014
● 1.6% for Home Loans 10% 2015 Base
Scenario 1 2 3
Stress proxy AAAsf AAsf Asf 5%
Default Stress 5.00x 4.00x 3.00x
Resultant Default Amount 45% 36% 28%
Arrears Stress 3.00x 2.50x 2.00x 0%
1
4
7
10
13
16
19
22
25
28
31
34
37
40
43
46
49
52
55
58
61
64
67
70
73
76
79
82
85
88
91
94
97
100
103
Resultant Arrears Amount 12% 10.5% 8%
Months to recover stress 24 24 18
Recovery Rate Haircut 50% 40% 30%
Resultant Recovery Rate 17% 20% 23% 10% Car Finance Defaults
Prepayment Rate (1x) 29% 32% 36% 2012 2013
Libor Stress 3.00x 2.50x 2.00x 8%
2014 2015
Servicing Cost In line with Standby Servicer Levels Base Case
6%
Minimum Monthly Servicing £30,000 £30,000 £30,000
Summary: 4%
● 1st Stop’s analysis shows full repayment of the Senior Facility under an indicating 2%
AA rating (with <3yr run-off); and only a 6% LGD in a AAA severity scenario
0%
Scenario 1 (AAAsf) 2 (AAsf) 3 (Asf) 1 6 11 16 21 26 31 36 41 46 51 56 61
Month Repaid Unpaid 41 30
Cash received / Principal if unpaid 94% n/a n/a
67
9. Timetable and logistics
Timetable and logistics
The proposed timing for the process
Timetable:
W/c 9th January Management presentations to be held in London
W/c 9th January Draft term sheet to be provided
W/c 16th January Stage 1 Credit Approval obtained
W/c 23rd January Preferred funders selected
W/c 30th January On site due diligence day for selected funders
Mid-Feb Final Credit Approval Obtained
Mid-March Signing of the Documentation
Structure:
• Initial £75m Secured funding with potential to increase in line with growth
• 3 year commitment
Key contacts:
Nick Parkhouse Jordan Blakesley James Handley
Executive Director Senior Manager Executive
+44 (0) 20 7197 7658 +44 (0) 20 7197 7517 +44 (0) 20 7980 9071
nparkhouse@uk.ey.com jblakesley@uk.ey.com jhandley@uk.ey.com
69
10. Proposed Data Provision
Proposed Data Provisioning
● Example of standard agreements
● Example of standard security document
● Underwriting criteria
● Collections criteria
● Provisioning policy
● Data tape
● Arrears balance at month end (time trend)
● Historical static pool data by annual vintage
● Historical financial information
● Latest financial forecasts - looking forwards 3 years
71
Appendix 1 – Additional information
Additional information
1st Stop currently has a forward flow and block funding facility with Conister Bank
Overview
● The 1st Stop Group entered into contractual funding arrangements with Conister Bank in 2013
● Conister Bank provides funding and holds the loans on its book, with The 1st Stop Group performing a full front to back service, including introduction,
underwriting and collection
● The loan book figures shown throughout this document relate to the entire 1st Stop Group’s ‘own book’ and includes those loans on the Conister book unless
otherwise stated
1st Stop has recently begun underwriting a Home Improvement loan product within its
Personal Loans business
Overview
● First underwritten in September 2015 1st Stop has underwritten 300 Home Improvement loans with a current balance outstanding of £1.2m, this book is included
in the Personal product analysis
● Product KPI’s:
● Average loan of £4k
● Average yield of 1.38%
● Customers have a weighted average credit score of 519
● Average term of 75 months
● Average age of 48
73
Defaults – Personal Loans Tenant
Cumulative defaults by annual cohort
Annual Defaults Personal book (excluding Tenant)

40% Cumulative
2014 584,294 47,923 8.2%

35%
2015 6,369,454 155,939 2.4%
30% 2016 13,011,211 5,375 0.0%
Tenant product (Discontinued)

25% Cumulative
2014 162,074 21,401 13.2%

20%
2015 2,404,125 336,287 14.0%
15% 2016 2,517,381 - 0.0%
● 1st Stop underwrote a “Tenant” personal loan

product. This product was subsequently
10% discontinued and is no longer being
underwritten
● The Tenant book was funded through the
5% Conister arrangement
● The remainder of the personal book has a
much lower rate of default than the historic
0%
tenant product
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42
2014 2015 2016 Tenant 2014 Tenant 2015 Tenant 2016
74
Recoveries & Prepayments – Personal Loans
Tenant
● The Personal Loan Tenant product
Post-Default Recoveries
was has been excluded from the
12% analysis in the presentation
10% ● The Tenant product is no longer

being underwritten and was funded
8% via the Conister arrangement which
is intended to go into run off
6%
4%
2%
0%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33
2014 2015 Tenant 2014 Tenant 2015
Principal Balance reduction over time

120%
100%
80%
60%
40%
20%
0%
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61
2014 2015 Tenant 2014 Tenant 2015
75
Disclaimer
This Document is being issued by The 1st Stop Group Limited (‘1SG’) to a limited number of recipients in connection with the possible funding transaction for 1SG.
The purpose of this Document is to assist the recipient in deciding whether it wishes to proceed with a further investigation of the funding, and in determining the level of
any indicative offer it may wish to make in connection with the Proposed Transaction (Specified Purpose). This Document does not constitute an offer or invitation in
respect of the Proposed Transaction, or any other sale or purchase of securities, or any of the businesses or assets, described in the Document.
The information in this Document, which does not purport to be comprehensive, has been provided by 1SG and has not been independently verified. While the
Document has been prepared in good faith, no representation, warranty, assurance or undertaking (express or implied) is or will be made, and no responsibility or
liability is or will be accepted by 1SG or any of its subsidiaries or by its officers, employees or agents in relation to the adequacy, accuracy, completeness or
reasonableness of this Document, or of any other information (whether written or oral), notice or document supplied or otherwise made available to any interested party
or its advisers in connection with the Proposed Transaction. All and any such responsibility and liability is expressly disclaimed. In particular, but without prejudice to the
generality of the foregoing, no representation, warranty, assurance or undertaking is given as to the achievement or reasonableness of any future projections,
management estimates, prospects or returns contained in this Document, or in such other information, notice or document. The recipient acknowledges and agrees that
no person has, nor is held out as having, any authority to give any statement, warranty, representation, assurance or undertaking on behalf of 1SG in connection with
the Proposed Transaction.
No information set out or referred to in this Document shall form the basis of any contract.
This Document has been delivered to interested parties for information only and on the express understanding that they shall use it only for the Specified Purpose. 1SG
gives no undertaking to provide the recipient with access to any additional information or to update this Document or any additional information, or to correct any
inaccuracies in it which may become apparent.
1SG reserves the right, without giving reasons, at any time and in any respect, to amend or terminate the procedure for the Proposed Transaction or to terminate
negotiations with any prospective funder. The issue of this Document shall not be deemed to be any form of commitment on the part of 1SG (or any other person) to
proceed with the Proposed Transaction or any other transaction. This Document shall not exclude any liability for, or remedy in respect of, fraudulent misrepresentation.
By accepting this Document, the recipient agrees to be bound by the foregoing limitations.
Under no circumstances should 1SG be contacted directly. All enquiries relating to this Document, the Proposed Transaction or any other transaction involving the
shares in, or business or assets of, 1SG should be directed in the first instance to:
Contacts:
Name: Nick Parkhouse
Tel: +44 (0) 20 7197 7658
Email: nparkhouse@uk.ey.com
76

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Project Lollipop

1 Executive Summary 6 Portfolio

2 Business Overview & Market 7 Financials

3 Origination and Underwriting 8 Funding

4 Collections 9 Timetable and logistics

5 Regulation and IT 10 Proposed Data Provision

• We specialise in underwriting consumers who are under-served by the high street

Loan Book Growth

Loan book growth of 80 94% 76

Limited 1st Stop Customer – “Near prime”

60% Credit profile • Applicant with some historic issues on

Detailed Underwriting Excellent Risk-Adjusted

Application Process • Prime and Sub-Prime lenders rely on

Average Monthly Originations (£m)

Loan book (£m)

• Pollen Street Capital have provided additional equity capital

• The businesses growth trajectory has resulted in the 50

ALEX MOLLART DAVID ENRIGHT MARK ROBINS

LINDSEY MCMURRAY MATTHEW POTTER PHILIP GEORGE

Senior credit facility FCA licences approved

2009 2010 2011 2012 2013 2014 2015 2016

Received equity funding from Pollen

Refinanced 2nd Lien facility,

Average monthly Originations (£m)

Loan book (£m)

High end prime Near prime Sub prime

Average monthly Originations (£m)

Loan book (£m)

Unilateral Notice - Home Loans

Average monthly Originations (£m)

Loan book (£m)

Average Loan Loan Book

Alex Mollart David Enright Mark Robins

Chief Chief Chief

Danielle Steve Beard Debbie Mike Taylor

1st Stop Home

• New CFO, New CTO, New Compliance Director

• Increased finance function, focus on improving business MI, recently

• Data Warehouse and Credit Analytics

• Upgrade to best-in-class processes and documentation

50% 40% 10%

1st Stop Holdings Limited Preference Shares

Mezzanine funding 1st Stop Options

Senior and Block funding

Origination Underwriting Packaging Approval Funding Welcome Relationship and

Car Finance (2016) Home Loan (2016) Personal Loan (2016)

Total Origination Split Total Origination Split Total Origination Split

Relationship management with brokers

Key differences between the products

Matching Business Call Credit Product

Third Party service

2 Manual underwriting (23% of total applications are rejected through underwriting)

Affordability assessments Customer calls:

2% of total applications to 1st Stop are written

Added Agreements NOD issued ‘Ongoing arrears’

Arrears Arrears DCA Arrears Arrears Arrears Arrears

Automated Arrears Arrears DCA Arrears Arrears Arrears Arrears

General Arrears General Arrears Arrears Arrears Arrears

Arrears Management: Documentation Process

Underperforming loans Process for recoveries

Methodology Draft provision rates (at November 2016)

• Joined 1st Stop in 2016 ● View Remedial Actions

• Previously a FS Regulatory specialist at ● Conduct Trend Analysis – common Issues/ improvements/