SVS is broker to Elephant, which will be valued at £6 million at the float price. The company’s operating subsidiary Elephant Loans, packages secured loans and mortgages.

Elephant increased revenues from £599,000 to £1.6 million in the two years to last March and lifted profits before interest and tax from £116,000 to £264,000 over the same period. The company predicts pre-interest and pre-tax profits nearly doubled to £507,000 on revenues of £3 million for the year to March 2006.

Chaired by David Gammond, former head of Excel Securities, with Allied Dunbar veteran and Mezzaninecorp founder Gary Miller-Cheevers as managing director, Elephant provides secured loans of between £25,000 and £2 million, with an average £39,000, charged an average 13.3 per cent. The company’s average residential mortgage is £205,000, charged 6.6 per cent, with commercial mortgages averaging £200,000.

The company, which is authorised by the Financial Services Authority for residential mortgages and non-investment insurance, claims to be one of fewer than 50 UK companies with ‘full loan packaging rights’, aimed at customers ‘seeking to consolidate and refinance existing sources of debt by tapping into the additional equity in their homes’.

Miller-Cheevers says increases in interest rates and potential house price falls might put a squeeze on ‘affordability’. But he argues this would have the effect of scaring mainstream lenders away from some markets, such as the self-employed, where Elephant wants to increase its market share.

The company intends to use the float proceeds to open seven regional offices and is considering finding a suitable acquisition in Ireland.