The Finance & Leasing Association (FLA) has renewed its call for the government and the Bank of England to take urgent action to support the non-bank lending market.
FLA members provided just over £138bn of new business in the 12 months to March 2020. Of this total, £44bn was provided by non-bank lenders.
In March, FLA new business totalled £11.345bn – a 20 per cent year-on-year decline.
“The asset, consumer and motor finance markets have been hit hard by the measures taken to deal with the coronavirus crisis, with a 20 per cent fall in new business in March alone,” said Stephen Haddrill, director general at the FLA.
“FLA members have also faced almost 1.2 million Covid-19 related requests for forbearance, of which 75 per cent have already been granted.
“The industry is committed to supporting their customers during these exceptional times.
“Urgent action is needed – in days, not weeks – to deliver financial support to the non-bank lending sector to ensure that we maintain a financial services sector that is diverse, innovative and competitive.”
This follows the FLA calling for urgent action for non-bank lenders last month.
Haddrill said that the Term Funding Scheme, which was launched in 2016 to encourage banks and building societies to expand their lending to small and medium-sized enterprises, should be opened up to non-bank lenders to help remedy the situation.