RateSetter said its asset finance division suffered fewer defaults than expected during the past few months, despite the Covid-19 pandemic’s significant impact on car dealerships.
The ‘big three’ peer-to-peer lending platform, which is in talks to be acquired by Metro Bank, launched into the asset finance market in 2017 and has since facilitated £36m to motor dealership small- and medium-sized enterprises across the UK. The platform’s asset finance portfolio accounts for two per cent of the RateSetter portfolio.
Car dealerships suffered from disruption in sales through March, April and May.
RateSetter said its asset finance division performed well through the crisis and forecasts healthy demand as restrictions ease and normality gradually returns. The platform warned of challenging times ahead but said it is prepared to manage those risks.
“We have stood ready to support our customers, although on the whole our asset finance portfolio has performed very well since March, with fewer than expected defaults to date and payment rates close to 100 per cent,” RateSetter said in a blog on its website.
“Our customers have been supported by government initiatives during the lockdown and the initial signs are that, as restrictions are eased, the industry has made a good start towards recovery and demand for cars from our dealership customers is healthy.
“As a result, we are receiving and are cautiously assessing applications for new facilities. We are preparing for more challenging trading conditions for the sector over the medium term and are ready with appropriate measures to manage risk.”
RateSetter announced last week that it is taking a cautious approach towards managing its lending volumes, as the Covid-19 pandemic has significantly hit consumer lending, which makes up the bulk of its loanbook.