billddrummer

Has GE Capital Stopped Lending Entirely?

Hi Judy,

Thanks for this topic.

It may be a godsend for regional and local banks who have been unable to compete with GECC on terms, rates and structure. GECC typically took the best credits available from the pool of potential borrowers, largely because of its pricing power. GECC could fund credits with run rates 150 basis points less than a typical regional bank, in some cases. Meanwhile, this left regionals with lower-quality borrowers, who in many cases, were weaker credit risks that required more underwriting and monitoring skill for credit management. As a result, interest margins compressed, while back-end costs (monitoring, documentation, and the like) rose.

if this is true, and GECC is not aggressively getting back in the game until next year, it may spell a window of opportunity to pick up good credits at reasonable costs.