The S&U PLC (LSE:SUS) "corporate tanker has turned", according to the specialist motor and property lender, which reported accelerating improvements seen since its annual meeting at the end of June.
In a trading update, it said the positive trends seen earlier this year had not only continued but gathered pace.
The recent Supreme Court ruling on motor finance commissions was highlighted as a key development, bringing greater legal certainty and confidence to the markets S&U serves.
It overturned a previous decision and rejected the idea that brokers owe a fiduciary duty to customers, which should limit wider legal risks across the consumer finance sector.
S&U expects its business to start recovering and gain momentum in the second half of the year.
On the motor finance side, Advantage Finance has outperformed the wider used car market, which saw a 6% rise in volumes in June compared with the same month last year.
Advantage’s lending reached £70.6 million for the half year, beating budget expectations.
Repayment rates have recovered to nearly 90% following the end of a regulatory investigation earlier this year, which had slowed collections.
The company also noted a more positive business climate following recent comments by Chancellor Rachel Reeves, who emphasised the need for a stable and growth-friendly financial services framework.
S&U expects this could attract more investment into motor finance, benefiting both lenders and customers.
Advantage is well placed to handle any future consumer redress claims following the Supreme Court ruling, particularly since it did not offer certain controversial debt collection agreements, investors were told.
The company also pointed to its strong customer relations and proportionate commission structures as protective factors.
Investment in Advantage continues, with new technology and processes introduced to improve customer service and lending efficiency.
These include a new telephony system to better match customer needs, simplified onboarding and improved affordability assessments.
On the property finance side, Aspen Bridging has maintained strong growth despite challenges in the UK residential market, which has been affected by high interest rates and ongoing delays at the Land Registry.
Aspen achieved record lending of £28.6 million in July and £106.4 million in the first half of the year, up 15% on 2024.
Collections at Aspen were even stronger, 49% higher year on year at £108.6 million for the half year. The number of late payments remained below budget.
Chairman Anthony Coombs said: "The skies are now brighter for a return to steady, sustainable growth than at any time since the pandemic.
"The difficult regulatory and economic conditions of the past two years have served to prove the resilience of our businesses. Of course, challenges will always remain, but the S&U corporate tanker is undoubtedly turning."
Borrowing stood at around £185 million, against available funding facilities of £280 million.
With growth picking up, the company expects funding needs to exceed current levels within two years.
These requirements are being addressed by the new chief financial officer, Chris Freckelton, and his team.