Asset-Based Lenders Are Playing a Key Role in Economic Turnaround for U.S. Businesses

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Industry data for the 4th Quarter of 2010 illustrates that asset-based lenders continue to provide critical capital to U.S. businesses as they start to grow and expand. The Commercial Finance Association's 4Q 2010 ABL Index shows signficant growth in new lending to businesses and dramatic improvement in the peformance of existing loans.

Asset-based lenders provided a life-line to borrowers during the recession and now will play an equally important role in helping those same businesses grow and prosper in the months and years ahead.

The Commercial Finance Association (http://www.cfa.com) today released its Quarterly Asset-Based Lending Index, Q4 2010, which revealed dramatic growth in new credit commitments and showed significant improvement in portfolio performance, with non-accruing loans dropping sharply. The index revealed:

  •     New credit commitments among asset-based lenders increased by 13.2 percent in the 4th Quarter
  •     Fifty-five percent of reporting asset-based lenders report an increase in new credit commitments
  •     Lenders’ non-accruing loans as a percentage of their total asset-based loans outstanding decreased 46 basis points in the 4th Quarter, with 50% of lenders reporting a decrease in non-accruals
  •     Sixty percent of lenders reported either a decrease of the same level of net write-offs in the 4th Quarter compared to the previous quarter

“The signs of increased economic activity we saw in the previous quarter clearly picked up steam as the year ended and the results of the 4th Quarter ABL Index show that asset-based lenders are playing a critical role in providing the capital businesses need to meet their needs as the economy grows,” said Andrej Suskavcevic, CEO, Commercial Finance Association. “Asset-based lenders provided a life-line to borrowers during the recession and now will play an equally important role in helping those same businesses grow and prosper in the months and years ahead.”

Businesses in need of financing are encouraged to utilize the CFA’s free online service, “Find a Lender,” by visiting http://www.cfa.com.

The Quarterly Asset-Based Lending Index was conducted by R.S. Carmichael & Co., an independent market research firm, to measure business growth, credit commitment, credit line utilization and portfolio performance of the 20 largest CFA members engaged in asset-based lending. The survey was commissioned by the Commercial Finance Association. For a full copy of the survey, please contact Brian Cove at (212) 792-9390 or bcove(at)cfa(dot)com.

About CFA
Founded in 1944, the Commercial Finance Association is the trade group of the asset-based financial services industry, with nearly 300 member organizations throughout the U.S., Canada and around the world. Members include the asset-based lending arms of domestic and foreign commercial banks, small and large independent finance companies, hedge funds, private equity firms, floor plan financing organizations, factoring organizations and financing subsidiaries of major industrial corporations.

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Brian Cove

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