Feeds

IT credit crunch comes home to roost

Tech lease defaults on the rise

Build a business case: developing custom apps

Big Blue is not alone

Big Blue is certainly not alone in dealing with the credit crunch and its effect on channel and corporate sales. The Equipment Leasing and Financing Association, which is an industry trade group with 700 members that tracks the $650bn equipment financing sector in the United States. The ELFA says that investment in equipment in software accounts for about 8 per cent of gross domestic product in the States, and that commercial equipment financing comprise about 4.5 per cent of GDP. (The latter helps foster the former).

ELFA released its Monthly Leasing and Finance Index for September today, which indicated that new leasing and financing volume for the month increased by 22.3 per cent to $6.5bn, but average losses (also called chargeoffs) as a per cent of net receivables rose to 0.86 per cent in September, up from 0.48 per cent a year ago. That was roughly the range that chargeoffs held at from September 2006 through September 2007, but as 2007 came to a close, the chargeoff rate pushed up into the 0.8 per cent range and has been lurking near 0.9 per cent since June of this year.

For the third quarter, which includes July, August, and September, new business volume fell by 0.1 per cent to $18.6bn after a poor showing in August, and for the nine-month period so far in 2008, new business volume for leasing and financing is up 1.9 per cent to just under $57bn.

This data is based on the compilation of leasing and financing data from the top 25 banks, financing companies, and manufacturers in the United States that have their own captive leasing arms, and it is not restricted to IT purchases, but all kinds of capital equipment that gets leased.

"The year-to-date volume increase can be attributed somewhat to greater utilization of lease financing by borrowers in light of the tight credit markets," explained Thomas Jaschik, treasurer at the trade group and president of BB&T Equipment Finance, in a statement accompany the release of the leasing and financing index numbers for September. "Lessors continue to cope with increased delinquencies and charge-offs and most expect this to continue into 2009."

According to a report in the Wall Street Journal this week, a small poll of chief information officers done this month by the CIO Executive Council indicated that 20 per cent of those polled had deferred or canceled IT purchases because of "unfavorable credit terms." ®

Build a business case: developing custom apps

More from The Register

next story
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Sonos AXES support for Apple's iOS4 and 5
Want to use your iThing? You can't - it's too old
Amazon says Hachette should lower ebook prices, pay authors more
Oh yeah ... and a 30% cut for Amazon to seal the deal
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
Chips are down at Broadcom: Thousands of workers laid off
Cellphone baseband device biz shuttered
Feel free to BONK on the TUBE, says Transport for London
Plus: Almost NOBODY uses pay-by-bonk on buses - Visa
Nintend-OH NO! Sorry, Mario – your profits are in another castle
Red-hatted mascot, red-colored logo, red-stained finance books
Twitch rich as Google flicks $1bn hitch switch, claims snitch
Gameplay streaming biz and search king refuse to deny fresh gobble rumors
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Maximize storage efficiency across the enterprise
The HP StoreOnce backup solution offers highly flexible, centrally managed, and highly efficient data protection for any enterprise.