The four largest U.S. banks saw loan growth of 1.6% in the second quarter, compared with a spike of more than 10% among midsize banks, according to SNL Financial. "Regulation has tilted the odds," said Anton Schutz, president of Mendon Capital Advisors. "The last thing [large banks] want to do is build their balance sheets."
Companies originated $7.5 billion in leases, loans and lines of credit for equipment last month, a 21% increase compared with May 2012, according to ELFA. In addition, delinquency fell to its lowest level in six months. "American businesses are better able to meet their financial obligations, creating a favorable environment for additional capital investment and job creation," ELFA President and CEO William G. Sutton said. The Equipment Leasing & Finance Foundation's confidence index has reached 57.3 this month, up from 56.7 in May.
The Consumer Financial Protection Bureau has established the Office of Financial Institutions and Business Liaison to work with banks and industry trade groups. Dan Smith, a former Freddie Mac official, will be the assistant director of the office. Catherine Galicia, who worked for the Senate and House and helped draft consumer-protection portions of the Dodd-Frank Act, will be assistant director for legislative affairs.
Companies are leasing and financing equipment at a steady clip, with new business volume increasing 29% last month compared with May, ELFA reported. The association said June was one of the best months for the industry since the recession. "Capital financing is really cheap right now; companies can borrow money and get a high rate of return," said Bill Choi, ELFA's vice president of research and industry services.
Businesses originated $7.1 billion in loans, leases and lines of credit last month, compared with $5.7 billion in August, said the Equipment Leasing and Finance Association. The agriculture, health care and information technology industries generated demand, ELFA President and CEO William Sutton said. However, this spending doesn't represent significant growth. "It's a replacement environment," Sutton said. "People aren't in a growth or expansion mode."