Lease payment holiday requests in the UK

Over the 30 years we have been arranging leasing and asset finance for 25,000 plus organisations, we typically only see a handful of companies every year asking for a lease payment holiday. Since the outbreak of COVID-19 in the UK, we have seen more businesses applying for a lease payment holiday request than in the previous 29 years combined.

To put this into a wider perspective, there has since March been a total of 416,000 requests to delay lease repayments for both private individuals and companies. As a result, leasing companies have struggled to deal with an unprecedented volume of customer service calls.

What is a lease payment holiday?

A lease holiday, often referred to in the leasing sector as a forbearance request, is where the leasing company stops taking a rental for a period of time, typically three months. These three months rentals are then added onto the back of the lease term.

Will you pay any extra interest or charges if repayments are delayed for three months?

Leasing companies in general have been fantastic. They have granted all reasonable forbearance requests. Most, if not all of the leasing companies we work with have not made a charge for this. In addition, they do not increase the rentals, hence it is a fair system where the end user clients have been treated fairly.

Will taking a lease holiday affect our company credit profile?

No, as far as we are aware, the lease company does not record a default. Only when you default do the credit reference agencies downgrade your credit rating.

Will asking for a lease payment holiday period affect my ability to take out a new lease agreement?

Leasing companies have different rules on how to lend to an existing client where there they have taken advantage of a three-month lease repayment deferment. From what we can see, the leasing company will lend again when you / the client has made a further four or five lease repayments. i.e. they have paid the three months plus either another one or two extra monthly repayments.

If I have taken advantage of a lease holiday deferment period, can I be granted an extension to this?

Circa 15% of companies that have been offered a lease deferment period have requested another three-month holiday. This is up to the discretion of the leasing company.  From what we can see, certain companies have been offered another holiday period. You will have to have sensible commercial reasons to ask for another extension.

You are not alone if you have asked for a lease forbearance request

We cannot name lease funders and who has done what. We are aware of one leasing company that has granted payment holidays to 66% of their customer base, others are typically between 20% to 29% of their client base.

One leasing company we work with has processed over 18,500 requests. Summary….you are not alone!

WestWon customers and general advice

If you have a current lease organised via WestWon and would like to speak to us about a lease holiday request, please call a member of our team now.

If you are a company and would like some general help and guidance on leasing holiday deferment plans or have been turned down for credit with your existing lease company, likewise, please call a member of our team on 01494 611 456.

Please note / Disclaimer

WestWon are a B2B leasing company and we do not operate in the private car sector, personal loan or mortgage business.

The information above is aimed at business’s, not private consumers.