After two years of high-flying performance, asset-based lenders and lease finance companies now find themselves wondering what might be next. In our good news, bad news economy it seems anything can happen.
- Inflation is up. Asset values are down.
- Supply chain disruption is down. Post-pandemic liquidity has dried up.
- Interest rates are up. Deal flow and loan originations are down.
In environments like the one we’re experiencing in 2023, portfolio optimization and risk management take on a new set of complexities. For asset managers, there are a number of scenarios that could materially impact financial, credit and regulatory risk.
Borrowers also face some new challenges in 2023. Costs are up. Interest rates are up. And growth projections may be far less rosy. Depending on the industry they’re in and where they are located, they be experiencing any one of the following:
- High diesel costs and reduced access to capital are slowing customer growth, impairing their ability to meet loan obligations.
- Deteriorating asset values and higher interest rates are forcing customers to defer upgrades.
- Reduced cash flow is resulting in less frequent asset maintenance.
- In certain sectors and/or regions reduced demand for housing and commercial real estate due to higher interest rates has slowed growth and reduced cash flow
Adding fuel to the 2023 fire, the future is extraordinarily cloudy. In our conversations with lenders and lease finance companies, some are unabashedly bullish about their business prospects for the rest of the year. Others have begun to see some red flags, signaling that some difficulties lie ahead. Still others are already dealing with increases in defaults, hard-to-find or distressed assets and more.
Asset Management and Being Nimble
More than at any time in the last several years, effective asset management demands fast action as conditions evolve. Based on our experiences working with lenders and asset managers over the last 25 years, we’ve identified four characteristics that allow asset managers and their institutions to stay ahead of the curve in uncertain, rapidly changing conditions…
- A close eye on assets – So lenders know where collateral assets are, their condition and whether they’re being properly maintained.
- A market-wide perspective – So lenders know when a customer’s financial condition may be deteriorating based on a broader knowledge base than their own information.
- Highly skilled collections and recovery personnel – So lenders can maximize loan performance by responding to heightened customer sensitivities in a challenging environment.
- A partner they know they can trust – So lenders and asset managers can focus on what they do best, knowing they’re working with a company who is as invested in their success as they are.
ACS has been a top provider of services to asset-based lenders and lease finance companies since 1998. Working with some of the country’s largest and most respected banks, finance companies and captive lenders, we’ve developed custom solutions to every asset management scenario imaginable.
Over our 25 years, ACS has developed an unparalleled ability to address portfolio pain points throughout the loan lifecycle. Our sophisticated skip tracing services are powered by proprietary Identifi® data and AI technology. Combined with our extensive boots-on-the-ground network, ACS bridges the gap between lenders’ internal capabilities and the real-world execution lenders need to improve portfolio performance and manage risk.
From top-tier, first-party collections to asset surveillance to recovery and more, ACS’s highly skilled team of seasoned industry professionals and nationwide network of rigorously evaluated agents help ensure that customers are treated with dignity and lenders get the risk-managed portfolio performance they need.
Does ACS have the right portfolio solution for you?
ACS clients come to us for a wide variety of reasons. Some choose us because our professionals consistently deliver superior customer experiences in both collections and recovery scenarios. Others choose us because they know that once we’ve been tasked with a challenge, they know it will be handled – quickly, professionally and cost effectively.
Regardless of the challenges your organization may be facing, chances are good ACS has helped lenders overcome the same challenge before. Find out for yourself by contacting Andrew Pace, ACS’s Chief Client Experience Officer to schedule an appointment.