Former payday lender Cheque Centre calls in administrators

Cheque Centre closed its remaining high street branches last year. Picture: Neil Hanna

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Cheque Centre, the Edinburgh-based group that withdrew from the payday lending sector in 2014 following regulatory pressure, has gone into administration.

The firm once had more than 300 high street branches but last year closed its remaining outlets to focus on trading over the internet under the Square Today brand.

Joint administrators Anthony Collier and Tom MacLennan, partners at FRP Advisory, said the shift in business strategy left Cheque Centre with “a number of sizeable, historical contractual and lease liabilities… resulting in an ongoing drain on the company’s working capital”.

The firm had explored a range of restructuring options, but the administrators said “unsustainable pressure” had been placed on its cash flow in the absence of a cash injection.

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Collier said: “Cheque Centre was in the process of emerging from its legacy business with its Square Today online platform, however in its current form the business could not sustain its ongoing costs and meet its historical liabilities.

“Following our appointment, the joint administrators will evaluate the financial position of the company and all 11 of the company’s staff are being retained whilst we assess the options for the business.”

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Vasanat International, which had been trading as Scottish Electric Group, is said to have faced “prolonged cash flow pressure”.

Provisional liquidator Donald McNaught of accountancy and business advisory firm Johnston Carmichael said: “Our main objective going forward will be to preserve value in the Scottish Electric Group’s remaining assets to maximise the return to creditors.

“Unfortunately, the process has resulted in job losses and we will work with the relevant government agencies to ensure employees are provided with the appropriate support.”

McNaught, who is a restructuring partner at Johnston Carmichael, said the business had faced prolonged cash flow pressure which, despite the efforts of management, it had been unable to overcome.

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