The Finance and Leasing Association (FLA) is calling for the Government and the Bank of England to take immediate action to support the non-bank lending market, as forbearance requests reach 1.6m.

FLA motor finance division members have received an estimated 613,000 forbearance requests in the last 12 weeks and has so far granted 90%. 

Consumer car finance data shows that shows the UK market declined 94% by volume in April, leaving funders with a significant cash-flow drain.

The UK's new car market in May closed 89% down year-on-year at 20,247 registrations, 163,477 fewer than in May 2019, according to figures from the Society of Motor Manufacturers and Traders (SMMT).

It was an improvement over the April result, which was 97% down versus April 2019. In order for funders to support a resurgence in the economy they must receive financial assistance now, says the FLA.

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