A London-based commercial lender has reported a 35% increase in the average amount advanced to MOT test centres in 2021, compared to the amount lent to garages in 2019. In addition, there has been a 21% rise in comparison to 2020.
Prior to the lockdowns last year, MOT garages were eighth on the list of most frequent clients for finance requests at lender 365 Business Finance. such businesses are now coming in fifth place – just behind the funding needs of convenience stores and food retailers, general retail outlets, restaurants, and the pubs and bars industry.
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Due to extended MOTs offered to some motorists during the first lockdown, which began in March 2020, a new spike in demand for MOTs towards the end of the calendar year has formed. As a result of this new seasonal peak, which spans across autumn and the beginning of winter, MOT garages are sourcing funding to keep on top of the extra demand according to the finance provider.
Managing Director at 365 Business Finance, Andrew Raphaely, said, “There are a number of drivers in the UK who are now having to MOT their cars later in the year, because of the March through to early summer lockdown in 2020 when many garages were not able to open, and the government extended the validity of MOTs by six months for all the motorists impacted by such closures.
“Although busy MOT test centres from September to December is essentially a good thing for these businesses, they are now having to plan further ahead financially to cover the extra demand during these months in terms of stock and staffing. Also, our customers are wise to the fact that merchant cash advance funding can help with cashflow management during the now unusually quieter months of the year too. The pandemic has certainly interrupted the normal pattern of annual MOT bookings for garages, for many years to come” concluded Raphaely