The impact of the Coronavirus crisis will be felt in the asset finance market for years to come, but agile businesses are already discovering new opportunities for growth.
Companies that had effective contingency planning could find opportunities for acquisition or expansion into new markets as other lenders reduce their market exposure, according to industry leaders.
A focus on digitalisation and home working is also creating new potential for growth in areas such as IT finance.
Internal opportunities include more rapid systems development and a greater willingness to embrace strategic change.
The research indicates that businesses are preparing for a long-haul to recovery, with finance demand only returning to pre-Coronavirus levels by 2022.
This will test the cash flow of many providers who report that, on average, 34% of their portfolios are in distress, with more than a quarter of their customers receiving payment relief, while 8% of customers are in arrears.
In six months, business leaders still expect 12% of their portfolios to be receiving payment relief, while arrears could grow to 11% of their book.
In response, it is likely the risk appetite of many businesses will decline, so securing low-risk new business will be a priority in future, second only to staff welfare, while operational cost savings and cash flow will be key, the research shows.
While around half the surveyed companies have furloughed staff, this is likely to transition to job losses in the longer term, but industry leaders indicate that skilled employees in areas including underwriting will become a more valued resource, along with accurate, up-to-date data.
Expected skills demands will focus on areas including arrears management, credit and strategy, along with IT expertise to support home working, analytics and processing.
Peter Hunt, managing director of GrowCap said: “The survey highlights both near-term restructuring requirements and that servicing customer demand will drive distinct changes in sales approach, credit and operational processing.
“Finance suppliers will need to become more digitised and ‘geographically neutral’. Process streamlining will be essential to cut costs over the short and medium term. Remote working creates new challenges, including compliance with data security.
“To help providers diagnose areas they need to improve, we’ve designed an operational process healthcheck and a technology resourcing service to help them secure the staff they require.”
GrowCap’s consulting network can access a wide range of industry experts and strategy leaders with specialist knowledge of every area of the asset finance sector to support initiatives ranging from research and concept development to change management and leadership.