Guides

Mainstream Lenders Hoping To Resume Lending In June 2020 

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The majority of private UK lenders are hoping to continue lending money to borrowers and businesses from 1st June. This follows a period of over two months where most private lenders have avoided lending out money during covid-19.

Bournemouth-based Amigo Loans were the first mainstream lender to confirm that they were not dishing out further loans during the lockdown, with lenders struggling to run sufficient income and affordability checks for customers, when there was so much uncertainty surrounding employment. Lenders struggled to commit to offering loans when customers and their businesses were not necessarily going to be cash rich.

However, recent falls in the R-rate for coronavirus and a fall in deaths recorded, is increasing confidence in the lending market and many are hoping to resume lending in June 2020.

For the last 10 weeks, those looking to borrowing money through short term loans, personal loans and similar, have had very limited options. Most turned to their high street banks who were offering schemes and bounce back loans and those struggling with repayments on mortgages and credit cards could apply for payment holidays.

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Around 7.5 million employed people were put on furlough during covid-19 giving them 80% of their regular wages – which for many came as an important lifeline and way to continue their standard of living.

However, those potentially on furlough were left in doubt over whether they would still be in employment when the lockdown ends, but the news of continued lending will be a sigh of relief to the thousands of people in the UK that work in lending including customer service teams, marketing specialists, underwriters and more.

Dan Kettle of Proper Finance commented: “The last few months have been very tough for lenders and brokers – since zero funding means zero profits – and lenders will have certain growth and repayment targets that they will need to meet.”

“Now that things are a little more certain in terms of income and employment, lenders should be more confident lending out money and slowly able to ramp up their lending again – and we could look at having a good Q4 in this sector.”

“The business loan sector may not be particularly busy, since banks were on hand to offer out relief, bounce back loans and other various schemes. But certainly the short-term loan sector should be busy and the mortgage market should be thriving again which has pretty much been dead for the last few weeks.”

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