Since the theme of this Monitor issue is vendor finance, and because we’re in the midst of compiling information for this year’s Monitor 100 report, we determined that we had enough critical mass from the survey feedback to dimension the vendor space. As far as we know, it’s never been attempted before, at least not in a way that you could easily see who the players are and how they stack up against each other. And yes, we decided to rank the top 25 in order of 2009 new business activity — is there any other way?
As you review the data, please keep in mind that the leasing companies shown in the exhibit — with a few exceptions — actively originate new business activity from sources other than just vendors or dealers. Also note that GE Capital Vendor is not included, as this information was not available at press time.
Not unexpectedly, 2009 vendor-related new business volume for the 25 most active vendor leasing companies was off almost 24%, or $7.6 billion, compared to the previous year. Of the 25 vendor leasing companies shown in the exhibit, 21, or 84%, reported declines in year-over-year new business activity.
Of particular note is CIT Vendor Finance, which made up over 47%, or $3.6 billion, of the year-over-year $7.6 billion decline in vendor leasing activity. CIT’s vendor business, which represented over 65% of the total volume from all of CIT’s commercial businesses in 2009 — $4.6 billion out of a total of $7 billion, down from $18.6 billion in 2008 — noted in its annual report that the 2009 decrease in origination volume of $11.6 billion in its commercial businesses “reflected weak economic conditions and the balancing of liquidity with customer needs.”
Perhaps 2009 can be best summarized by a comment that was provided by one of the vendor leasing participants, who said, “As competitors pulled away from the market, it put considerable pressure on our resources to process transactions within industry standard time frames. Adding to this was the combination of a poor economy and the tightening of credit standards, which meant we were reviewing many more transactions to achieve expected levels of volume.”
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