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Credit Utilization Drops Below 40% Mark in Q4 2012, CFA Survey Shows

March 12, 2013, 07:54 AM
Filed Under: Association News

A new report released by the Commercial Finance Association (CFA) shows asset-based lenders increased their total credit commitments to by 2.0% during the fourth quarter of 2012 and by 6.7% over the past year. Asset-based lenders also reported that new credit commitments grew 6.6% in the fourth quarter over the previous quarter.

The increase in total credit commitments during the fourth quarter of 2012 marked the seventh consecutive quarter that asset-based lenders have increased total credit commitments for American businesses.

In a clear signal that U.S. businesses remain cautious about expanding and increasing their use of capital, the closely watched credit utilization rate dropped below the 40% mark (39.6% for Q4) for the first time in 2012.

CFA’s Asset-Based Lending Index showed credit utilization rates hit their lowest level during the Financial Crisis at 34.6% during the fourth quarter of 2009. Since that time, credit utilization steadily climbed to 41.8% in the second quarter of 2012.

“Asset-based lenders continue to do their part in providing the essential working and growth capital to help get America working again,” said Commercial Finance Association CEO RobertTrojan.

“The fourth quarter demonstrated how Washington gridlock and lack of leadership can have a paralyzing effect on our nation’s very fragile economy,” continued Trojan. “With another Washington standoff over the debt ceiling looming on the horizon, let’s hope that a resolution can be found that allows our nation to avoid the mistakes made in the final months of 2012.”

The new information on asset-based lending activity was released as part of CFA’s Quarterly Asset-Based Lending Index. CFA has tracked asset based lending activity and published the Quarterly Asset-Based Lending Index since March 2008 in an effort to provide a snapshot on national commercial lending activity. CFA’s Quarterly Asset-Based Lending Index is based on information provided by 20 of the nation’s largest asset-based lenders.

A full copy of CFA’s Quarterly Asset-Based Lending Index is available on the CFA’ s website .

Founded in 1944, the Commercial Finance Association is the trade group of the asset-based lending and factoring industries, with nearly 300 member organizations throughout the U.S., Canada and around the world. CFA provides education, networking opportunities and industry advocacy on a domestic and international basis to the commercial finance community. financing organizations, factoring organizations and financing subsidiaries of major industrial corporations.

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