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FLA urges swift action to help non-bank lenders

Time 2 years ago

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.

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‘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.’

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