The Phoenix Management, a part of J.S. Held, second quarter
Lending Survey results highlight concern about the impact of
continued elevated interest rates and the economic uncertainty that
accompanies it.
JERICHO,
N.Y., June 26, 2024 /PRNewswire-PRWeb/ -- Global
consulting firm J.S. Held, proudly celebrating 50
transformative years, reveals the "Lending Climate in America"
survey results from Phoenix Management, a part of J.S. Held. The
second quarter survey results highlight concern about the impact of
continued elevated interest rates and the economic uncertainty that
accompanies it.
The Q2 Lending Climate in America survey
revealed that all lenders identified the retail, restaurant, and
hospitality industries as the most likely to experience volatility
in the next six months. The overwhelming majority identified real
estate as a close follower.
Phoenix's Q2 2024 "Lending
Climate in America" survey asked lenders which factors could have
the strongest potential to impact the economy in the upcoming six
months. Two-thirds of lenders are most concerned about the interest
rate/policy risk, while one-third of lenders believe the US budget
deficit and the stability of the stock market have the strongest
potential to impact the economy. Lenders also expressed concern
regarding geopolitical risk (war), the looming debt crisis, and
constrained liquidity in capital markets. To see the Q2 2024
"Lending Climate in America" results, historical survey results, or
to participate in future surveys, please visit
https://www.phoenixmanagement.com/lending-survey/.
Lenders revealed what actions their customers may take in the
next six months. Half of the surveyed lenders believe their
customers will enter new markets or raise additional capital, the
latter following an anticipated decrease in interest rates.
Introducing new products/services and making new capital
investments follow closely with a third of lenders expressing those
plans for their customers.
All respondents identified the retail, restaurant, and
hospitality industries as the most likely to experience volatility
in the next six months, followed closely by real estate at 83% of
respondents.
Additionally, Phoenix's
"Lending Climate in America" survey asked lenders if their
respective institutions plan to tighten, maintain, or relax their
loan structures for various sized loans. Of the various loan sizes
(over $25M, $15-25M,
$5-15M,
under $5M), a majority of lenders
(ranging from 60% to 100%) plan to maintain their current loan
structure, a stark switch from the prior quarter where 60% of
lenders planned to tighten their loan structure across all ranges.
This idea is cemented by 83% of surveyed lenders believing there
will be an interest rate decrease in the upcoming six months (the
other 17% believe the Fed will make no change to interest rates in
the next six months).
Lender optimism in the US economy increased slightly in the near
term from 1.91 in Q1 2024 to 2.00. There is an even split amongst
lenders for B, C, and D-level performances. More telling, lender
expectations for the US economy's performance in the longer term
decreased significantly from 2.55 to 1.83. Of the lenders surveyed,
83% believe the US economy will perform at a "C" level during the
next twelve months, an increase of 54 percentage points from the
prior quarter.
"Lenders have adjusted their expectation for interest rate
reductions. The continued delays have heightened their concern
regarding the economy and have resulted in increased pessimism
regarding long-term economic outlook," says Michael Jacoby, Senior Managing Director of
Phoenix Management, a part of J.S. Held. "Everything hinges on
interest rate cuts – refinancing, M&A activity, and, of course,
the crashing commercial real estate market. As C&I lending
opportunities stagnate, we see lenders getting a bit more
aggressive to maintain and attract loan assets, as evidenced by the
shift in Q2 from tightening loan structures to maintaining loan
structures." Jacoby continues, "The Q2 survey revealed that all
lenders identified the retail, restaurant, and hospitality
industries as the most likely to experience volatility in the next
six months. The overwhelming majority identified real estate as a
close follower. We expect continued volatility and choppiness in
borrower performance and lender outlook until the Fed begins
reducing rates and the outcome of the 2024 presidential election is
decided."
Learn more about the dedicated and entrepreneurial experts who
help transform J.S. Held, explore our story, and celebrate this
momentous milestone, our 50 & Forward celebration, with us at
jsheld.com.
About Phoenix Management, a part of J.S. Held
For over 35 years, Phoenix has
provided smarter, operationally focused solutions for middle-market
companies in transition.
Phoenix Management Services® provides turnaround, crisis and
interim management, and specialized advisory for both distressed
and growth-oriented companies. Phoenix Investor Services® provides
quality of earnings, operational diligence, Quality of Enterprise®,
business integration, sell-side business preparation, and other
transaction-related support. Phoenix IB® provides seamless
investment banking solutions including M&A advisory, complex
restructurings, and capital placements.
As a part of J.S. Held, Phoenix
works alongside more than 1,500 professionals globally and assists
clients – corporations, insurers, law firms, governments, and
institutional investors.
About J.S. Held
J.S. Held is a global consulting firm providing technical,
scientific, financial, and strategic expertise across all assets
and value at risk. Our professionals serve as trusted advisors to
organizations facing high stakes matters demanding urgent
attention, staunch integrity, proven experience, clear-cut
analysis, and an understanding of both tangible and intangible
assets. The firm provides a comprehensive suite of services,
products, and data that enable clients to navigate complex,
contentious, and often catastrophic situations.
More than 1,500 professionals serve organizations across six
continents, including 81% of the Global 200 Law Firms, 70% of the
Forbes Top 20 Insurance Companies (85% of the NAIC Top 50 Property
& Casualty Insurers), and 65% of the Fortune 100 Companies.
J.S. Held, its affiliates and subsidiaries are not certified
public accounting firm(s) and do not provide audit, attest, or any
other public accounting services. J.S. Held, its affiliates and
subsidiaries are not law firms and do not provide legal advice.
Securities offered through PM Securities, LLC, d/b/a Phoenix IB, a
part of J.S. Held, member FINRA/ SIPC or Ocean Tomo Investment
Group, LLC, a part of J.S. Held, member FINRA/ SIPC. All rights
reserved.
Media Contact
Kristi L Stathis, J.S. Held, +1 786 833 4864,
Kristi.Stathis@jsheld.com, JSHeld.com
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SOURCE J.S. Held