Towergate Financial rescues John Charcol from administration

John Charcol is one of the highest profile brokers in the mortgage market, with its technical expert Ray Boulger regularly appearing in the mainstream media but it has been hit hard by the downturn in the mortgage market and slashed advisers’ wages last year after axing a quarter of its staff and closing offices in 2008.  

The plan to launch a fee-based whole of mortgage service with its advisers working from HSBC branches was launched in March but was canned eight months later.

Difficult past

Accounts from Companies House reveal that John Charcol made a £1.2 million loss even before the credit crunch began to bite. The broker had debts of £7 million for the year ending 31 December 2007.

Founders of the mortgage broker John Garfield and Charles Wishart bought out private equity shareholder Advantage Capital in May 2008 after being forced to inject £1.5 million into the business following warnings from auditors.  

The founder’s injection of capital was matched by a £1.2 million drawdown facility from Lloyds Banking Group and £600,000 from Jon Moulton of Alchemy Capital, which are not repayable until 2013.

The national mortgage broker has had a convoluted history with a plan to sell the business for £50 million failing through in January 2008. Bradford & Bingley bought the broker for £100 million in 2000 but it was later taken back into private hands at a loss.  

John Charcol began dabbling in the general insurance market in December when it formed a partnership with Lark Insurance Brokering Group.  

Garfield said both businesses had the opportunity to benefit from the deal.