He said their service and rates could be compared with borrowing £50 from a mate, then repaying a couple of weeks later and buying him a pint to say thanks. On the basis that you’d also buy your own pint, he said it was cheaper (at London beer prices) to borrow from his firm. And his firm charged an annualised interest rate of over 1,000%.

I wasn’t about to judge him because, at the time, I was a BDM for a factoring company in Sydney. I used to sell our pricing by asking clients what level of discount they would offer for immediate payment from debtors, to which they usually said 5%. On this basis, I could argue that factoring was cheaper, provided I didn’t mention the regular non-approval of invoices and the fact the client still carried the risk of the invoice not being paid.

Is this sort of thing wrong? Perhaps. But it depends… 

Is the client sophisticated? Have they had the pricing expressed to them in a variety of understandable ways, of which the ‘sales pitch’ is only one?

In this context, it’s easy to understand the push towards regulation. By imposing strict procedures on to an industry with a heavy threat of enforcement action, you can be far more comfortable that borrowers are being protected.

In my career (which started in 1999), I have seen three regulatory impositions. The regulation of mortgages in 2004, the new rules in 2009 and most recently in March 2016 the encroachment of mortgage regulation into the second charge bridging space. Transcending these changes has been a generally increasing demand for lenders to treat their customers fairly.

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Of course, many (if not most) of the senior people in our short-term finance industry have more regulatory experience than me, and this probably explains why our sector seems to be taking the latest push towards regulation in its stride.

Outsiders may perceive regulation as a grave threat, but I believe Ortus and most of the other lenders are already abiding by the key principles of “treating customers fairly”.

This doesn’t mean we all share a standard form for expressing outline terms, such as a KFI or KFOD, although this might happen in time. It doesn’t mean we all follow a process of presenting our business card at the first meeting and ensuring everything is done in a strict order. However, we do ask ourselves hard questions about whether our service will genuinely benefit a client before agreeing to do a deal.

For example, if a client wants a bridge while he sells his property in the hope of getting 5% more on the price, we need to be sure the costs of bridging aren’t going to wipe out this gain. If the client is refinancing his lender in the hope of retaining his asset, we ask ourselves if his hope is realistic or whether we’re charging interest for a stay of execution. All these questions are designed to protect clients and on occasions it means we walk away from profitable and well-secured deals.

Regulation, when it comes, will clearly compound these behaviours and impose them on the small section of the industry which might not be following them. However, for the key players it is probably something to be welcomed by increasing the respect for the majority of operators who already do the right thing.