Confidence in the asset-based lending market held steady in the third quarter as banks and other lenders kept a close eye on the bigger economic picture, according to data released by the Secured Finance Network.
Asset-based lending grew modestly in the second quarter for banks and more significantly for other lenders, according to the Secured Finance Network’s Asset-Based Lending Index and SFNet Confidence Index.
According to cumulative data for 2020 published in SFNet’s Annual Asset-Based Lending Survey, the $273.9 billion in total credit commitments by asset-based lenders in 2020 increased just 2% compared with the $268.6 billion in total credit commitments recorded for 2019.
According to the Secured Finance Network’s 2020 Annual Factoring Survey, overall factoring volume in the U.S. declined 25.9% in 2020, while international factoring showed significantly increased activity, with a 61.8% rise in volume.
The Secured Finance Network’s 76th Annual Convention, “This Way Forward,” will take place from Nov. 17 to 19 and will cover financial, economic and political disruptions that banks and finance companies face in the midst of a pandemic and the aftermath of the U.S. election.
The effect of COVID-19 on the asset-based lending market became apparent in the second quarter as the industry’s most recent data reflect a 24.1% decline in total bank loans and 29.4% drop quarter over quarter in non-bank lending, according to the Secured Finance Network.
Julia Gavrilov, counsel in the Garden City, NJ, office of Moritt Hock & Hamroff, was chosen as a recipient of the 2020 Secured Finance Network’s 40 Under 40 Awards. The global award recognizes rising stars in the secured finance industry.
According to SFNet, total commitments for bank lenders in Q1/20 rose 7.8% compared with Q1/19 but were relatively flat compared with Q4/19. For non-bank lenders, total commitments rose 15.2% compared with Q1/19 but fell 1.8% compared with Q4/19.
According to a survey from the Secured Finance Network, the factoring industry saw only minor changes in the 2018-2019 time period, except for a significant increase in credit losses, most likely attributable to the competitive environment through 2019.
According to data from SFNet, lenders reported asset-based lending to U.S. businesses increased steadily and credit quality remained strong in Q4/19, but the unfolding COVID-19 pandemic is having an unprecedented impact on financial markets.