Call for Government support as forbearance requests hit 1.6m

The Finance & Leasing Association (FLA)  continues to call for the Government and the Bank of England to take immediate action to support the non-bank lending market, as new FLA figures released today show that the number of Covid-19 related requests for forbearance reached 1,623,000 (over 1.6 million) in the twelve weeks to 29th May 2020.  Of that total, 88% had been granted by the end of that period.

Stephen Haddrill, Director General at the FLA, said “Figures released today of a record fall in the UK economy in April of more than 20% highlights the urgent need for the Government and Bank of England to enable all lenders – bank and non-bank  – to access the funding required to meet the huge demand for forbearance and new credit as the economy reopens. ”

“FLA members have a track record of supporting businesses and households during difficult times, with our latest figures for April showing new lending of more than £4.7 billion despite the lockdown.  We have put forward a Term Funding Pipeline proposal which we believe will open up the current financial support schemes to a wider group of lenders – there should be no further delay, action is needed now.”

In the twelve weeks to 29 May 2020, FLA members received an estimated 1,623,000 requests1 for Covid-19 related forbearance from customers.  1,424,000 (88%) of these requests had been granted by that date.

Over the same period, FLA asset finance division members received an estimated 287,000 requests for forbearance and had so far granted 83%.  FLA motor finance division members received an estimated 613,000 requests and had so far granted 90%.  FLA consumer finance division members had received an estimated 723,000 requests for forbearance and had so far granted 88%.

Note 1: A single request for forbearance may cover multiple agreements held with that lender.

	Apr 2020	% change on prev. year	3 months to Apr 2020	% change on prev. year	12 months to Apr 2020	% change on prev. year
Total FLA new business (£m)	4,725	-60	25,917	-27	131,047	-5
By customer:
Business (asset) finance (£m)	1,612	-47	6,624	-29	32,899	-6
Consumer finance (£m)	3,113	-64	19,293	-26	98,147	-5
Within the above:
Motor finance (£m)	607	-86	8,233	-38	42,840	-9