NEW YORK, July 31, 2019 – U.S. businesses continue to grow, as reflected by increased borrowing from banks and non-bank lenders, according to data released by the Secured Finance Network (SFNet) today.
According to SFNet’s latest Quarterly Asset-Based Lending (ABL) Index, total commitments increased slightly in Q1, however outstandings ($106.9B) for bank lenders increased by 6.9% over 4Q2018 and 8.5% over the same quarter in 2018. This represents a continuation of a higher utilization trend seen over the past few quarters. For nonbank lenders, general trends were the same, but with higher growth at 4.1% quarter over quarter and 4.5% year over year. Commitments increased 17% over the same quarter in 2018.
“This new data indicates borrowers have an increased need for capital to support expanding levels of inventory and accounts receivable, which is a positive sign for the economy,” said David Grende, president of SFNet and President & CEO, Siena Lending Group, based in Stamford, CT.
“Credit quality remains strong in Q12019 as indicated by gross write-offs being at near-historic lows. “Overall Q1 was a solid quarter for the ABL industry. The industry was amply able to provide companies with the capital they needed to grow,” said Grende.
“SFNet’s Quarterly Asset-Based Lending (ABL) Index, coupled with our landmark Market Sizing & Impact Study, provides vital data on key marketplace trends. It also reflects the economic role of secured lending,” said Richard D. Gumbrecht, SFNet CEO.
The Secured Finance Foundation (SFFound) also released its Secured Lending Confidence Index in conjunction with the ABL Index. This provides a qualitative forward-looking view of the market and the U.S. economy.
“What we have noted in Q1 2019 is that overall, sentiment remains positive, but at levels which are less positive than prior quarters. Going back to early 2018 the largest declines have been expectations of demand for new business and overall business conditions. There are no indicators which have dipped below the midpoint, which would indicate an expectation of a decrease/decline in the next three months,” said Charlie Johnson, foundation chairman.
The Quarterly Asset-Based Lending Index and Secured Lending Confidence Index are conducted for SFNet by Westat, an independent market research firm.
About Secured Finance Network
Founded in 1944, the Secured Finance Network (formerly Commercial Finance Association) is an international trade association connecting the interests of companies and professionals who deliver and enable secured financing to businesses.
About Secured Finance Foundation
Founded in 1990, the Secured Finance Foundation (formerly CFA Education Foundation) encourages, facilitates, and supports education, innovation, and charitable works for the betterment of organizations and professionals who deliver and enable secured finance – and their communities.