The asset finance, consumer finance and motor finance industries see opportunities for growth over the next year as the vaccine roll-out gains pace, a survey from the Finance & Leasing Association (FLA) has revealed.
The association’s Q1 2021 Industry Outlook Survey of 79 FLA members between 16 December 2020 and 8 January 2021, has found that if the latest lockdown and the vaccine rollout successfully bring the coronavirus under control, the majority of members expect to see growth over the next 12 months.
Almost 70 per cent of members predicted some increase in new business over the coming year, with 37 per cent expecting new business to rise by 10 per cent or more.
However, the majority of FLA members (84 per cent) expect no change in the availability of funding over the next three months. 77 per cent said that they don’t expect to see a change in funding access over the next 12 months.
Just over half of members (51 per cent) expect the cost of funding to remain stable over the next year, while a third of members forecasted some increase in funding costs.
Over the next 12 months, 40 per cent of members forecasted some increase in employment by their companies, 36 per cent predicted no change and 22 per cent expected a slight drop.
The survey also revealed that FLA members were divided on the outlook for economic conditions, with 52 per cent expecting some improvement over the next 12 months and 44 per cent predicting conditions to worsen.
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“The results of the Q1 2021 survey reflect the industry’s concerns about the adverse impact of prolonged uncertainty on businesses and households,” said Geraldine Kilkelly, head of research and chief economist at the FLA.
“But the results also point to the underlying pre-crisis strength of FLA members which has helped them weather the pandemic so far.
“The specialist knowledge of finance providers means the industry is in an ideal position to help drive forward government initiatives such as levelling-up and net-zero.”
FLA members were less optimistic about UK business insolvencies.
92 per cent predicted some increase in the number of UK business insolvencies over the next 12 months, with almost half (49 per cent) expecting a significant rise.
Over two thirds of members predicted some increase in the number of retail motor dealership insolvencies over the next 12 months, although most (54 per cent) expected this rise to be slight. 31 per cent of members expected no change.