Feeds

IT credit crunch comes home to roost

Tech lease defaults on the rise

Next gen security for virtualised datacentres

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
6 Obvious Reasons Why Facebook Will Ban This Article (Thank God)
Clampdown on clickbait ... and El Reg is OK with this
Banking apps: Handy, can grab all your money... and RIDDLED with coding flaws
Yep, that one place you'd hoped you wouldn't find 'em
No, thank you. I will not code for the Caliphate
Some assignments, even the Bongster decline must
Barnes & Noble: Swallow a Samsung Nook tablet, please ... pretty please
Novelslab finally on sale with ($199 - $20) price tag
Ballmer leaves Microsoft board to spend more time with his b-balls
From Clippy to Clippers: Hi, I see you're running an NBA team now ...
Video of US journalist 'beheading' pulled from social media
Yanked footage featured British-accented attacker and US journo James Foley
Primetime precrime? Minority Report TV series 'being developed'
I have to know. I have to find out what happened to my life
Broadband slow and expensive? Blame Telstra says CloudFlare
Won't peer, will gouge for Internet transit
Netflix swallows yet another bitter pill, inks peering deal with TWC
Net neutrality crusader once again pays up for priority access
prev story

Whitepapers

Best practices for enterprise data
Discussing how technology providers have innovated in order to solve new challenges, creating a new framework for enterprise data.
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.
Advanced data protection for your virtualized environments
Find a natural fit for optimizing protection for the often resource-constrained data protection process found in virtual environments.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?