Given the volume rebound in North American production and the general improving credit metrics of the major OEM's and parts suppliers, lenders are gradually returning to the sector.  But how are they returning? 

In many cases, companies are working with their existing financial institutions to improve their existing facilities, helping them to gear up for future growth.  In some cases, they are working with their lenders to improve the operations of the company such that they are no longer in special risk departments.  And in another subset, companies are turning to asset backed lenders as a primary source of liquidity.  We are witnessing traditional banks and ABL's compete for the same business, and cases where ABL's have moved into sub-sections of automotive where they have not tread in the past.

What does the future hold in this regard?  Is this an anomaly, and lenders will return to normal practices in the near future, or is the marketplace seeing more of a permanent shift?

Regardless of the type of lender, EDC is willing to work with Canadian companies to support their financial needs - at this point, we are happy to see that the financial industry is back supporting the automotive manufacturing space.

Disclaimer:

The views expressed here are those of the author, and not necessarily of Export Development Canada

Les vues exprimées dans ce propos sont celles de l'auteur. Elles ne reflètent pas nécessairement le point de vue d'EDC.