Secured Lending Confidence Index
SFNet’s Confidence Index is based on responses from industry executives. The Confidence Index is a qualitative forward-looking view of the market based on five questions which deal with the next three months as opposed to our standard quarterly reporting which reports actual historical results. It is our view that it is important to look at trends in the responses and how they have changed over time. The responses are on a 3-point scale where a response of “1” indicated a decrease/decline, a response of “2” indicated that things are expected to stay the same and a response of “3” indicates that the expectation is an improvement/increase.
Non-bank lenders reported a slightly more optimistic business outlook than bank lenders in Q2 in all five categories measured by the SFNet Confidence Index: economy/business conditions; portfolio performance; demand for new business; utilization; and hiring expectations. They were most positive about demand for new business, and slightly more reserved about business conditions. Bank lenders had a moderate business outlook overall in Q2, perhaps reflecting the recent data on non-accruals and write-offs, the summary analysis noted. They were most optimistic about hiring expectations, and most reserved about portfolio quality. Compared with Q1, scores increased in two categories and declined in three.