A MAJOR independent motor finance provider is reportedly on the brink of collapse.
It comes weeks after plans were confirmed for a £9billion industry-wide compensation scheme.
Blue Motor Finance is lining up administrators as it looks to secure a rescue deal, according to Sky News.
The accountancy firm EY is understood to have been selected to work with Blue Motor Finance, which is said to be facing a redress bill of over £50million.
EY would also be expected to oversee an insolvency process if no rescue deal is agreed.
Motor finance industry insiders told Sky News that London-listed bank Shawbrook had cancelled a “forward flow” funding agreement with the company earlier this year.
Blue Motor Finance is described as “one of the UK’s premier consumer motor finance companies, lending over £1bn to over 120,000 customers” on investor Cabot Square’s website.
Its own website said it had “become one of the UK’s leading technology and analytics driven companies lending £2.5bn to more than 250,000 customers”.
It is currently unclear how much of that lending activity was within the scope of the Financial Conduct Authority (FCA)’s compensation programme.
The FCA recently confirmed it would launch the £9.1billion consumer redress scheme.
Several firms, including the finance arms of BMW and Volkswagen, are preparing to launch challenges to the FCA scheme.
The Sun has reached out to Blue Motor Finance for comment.