These are unusual times and 2021 is likely to be a very interesting year in the Asset Finance Market which has been developing at pace with new entrants bringing innovation and existing lenders needing to respond in kind.
Here are seven predictions from Clive Pacey, an experienced Asset Finance Broker.
- The big four banks drift away from invoice financing will continue. Existing clients will possibly encounter price hikes and a drop in facility size and service. This is the year that the independents will take possibly their largest share of the market yet. This would be the year that rumours of a major bank finally pulling out of invoice financing finally come to fruition
- Straightforward lending funders have either been bolstered or hit by the CBILs. The boost will not last for much longer and there are already signs of new lenders ready to enter the market to snap away at the heels. I also believe there could be a major failure in this sector.
- More lenders will come into the market in very niche sectors. An example is lending purely against one online re-sellers contracts. R&D tax credits and Trade also have some excellent nimble niche players. Specialisation is key.
- There will be a public backlash against the Bounceback loans (less so CBILs) once the many frauds have been uncovered. This will be a major press story
- There could be some consolidation in the invoice finance market but also, I am hearing of new entrants. All very healthy
- The Insolvency Profession will come under greater scrutiny. Not before time many will say but this will not be an environment where abuses will be acceptable. Banks and IPs must be fully aware that SMEs and business owners have a great deal of public sympathy in these times.
- Credit Insurance will continue to tighten and that will impact on facilities at all levels.
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