There has been a steady upturn in consumer confidence heading into 2013, the beneficiary of a financial and credit perspective that has had a positive effect on both consumer and commercial lending entities.
(PRWEB) November 29, 2012
LeaseQ, one of the leading providers of equipment leasing and financing options in the United States, is seeing a steady upturn in consumer confidence heading into 2013, the beneficiary of a financial and credit perspective that has had a positive effect on both consumer and commercial lending entities.
According to Fitch Ratings, which covers the lending industry, sector strengths heading into the new year include reduced leverage, stronger capital, liquidity, and funding profiles, as well as tightened underwriting standards and more rationalized cost structures. These factors are predicted to enable issuers navigate some of the current that affects this sector and maintaining ratings stability.
Asset qualities have also improved significantly, driven by an upswing in the U.S. economic indicators, rising consumer confidence, and better than average residual values for used assets and equipment. These residual values were mostly created through production and capacity cuts during the economic downturn, and there may be a slight weakening in asset quality trends during the first half of 2013, as credit normalization begins to stabilize.
Leverage metrics, while currently below pre-crisis levels, demonstrated a higher than normal trend in 2012, primarily driven by portfolio growth, improved access to needed funds, and a resumption of dividends and share buybacks. Fitch expects that lending entities will adopt a conservative approach when it comes to leverage management and liquidity levels, as the economic recovery remains uncertain, and the future of credit quality is still very much of a concern across the board.
Access to funding markets may also be affected by ongoing euro zone debt concerns.
Fitch goes onto predict that many of the key industry risks are largely macroeconomic in nature, as related to the still fragile U.S. economic recovery, not to mention a weakened housing market and a restrained loan / lease demand. Demand may be worsened by the euro zone situation and the approaching fiscal cliff scenario in the states.
Based in Boston MA, LeaseQ is one of the leading providers of commercial equipment leasing options in the United States.