The Finance and Leasing Association today urged the government and Bank of England to take swift action to support the non-bank lending market.
New figures to be released next week by the trade body for the UK’s asset, consumer and motor finance sectors will show that FLA members provided nearly £141bn of new business in the 12 months to February 2020 – two per cent more than in the same period to 2019. Of that total, £46bn was provided by non-bank lenders.
FLA director general Stephen Haddrill said: ‘The asset, consumer and motor finance markets play a significant role in supporting businesses and households across all sectors of the economy.
‘We have welcomed the financial support schemes that the government and Bank of England have put in place so far, but urgent action is now needed to ensure that non-bank lenders are able to continue to serve customers, both through new lending and forbearance.’
He added: ‘Non-bank lenders rely heavily on the capital markets and bank funding, which are essentially closed to them. Support needs to be provided to non-bank lenders to help them deal with the huge cashflow drain from forbearance, with Covid-related requests growing by more than 1,000 per cent in the week commencing March 16, followed by a further 249 per cent increase the following week.
‘This sector needs urgent government help to ensure that it is still in a position to lend to individuals and businesses when the current market disruption ends, because without their input, the UK’s economic recovery will be much slower.’