Wobble in the Wheel Credit and collections professionals see early signs of imbalance BY SUSAN L. HODGES W ATCH A TRUCK IN NEED OF A WHEEL ALIGNMENT make its way down the highway, and you can’t help but notice the quiver. Barely visible at first, the back-and-forth movement increases if un-checked until the vehicle is a hazard to drive. Ken Katz, Senior Credit Manager at Wells Fargo Equipment Finance, Inc., in Min-neapolis, is watching a different kind of wobble—albeit a slight one—in his firm’s credit and collections. “Delinquencies and write-offs for the last two to three years were as low as they could go, and we’re still at a very good level,” says Katz. “But we’re starting to see a slight trend in the other direction.” Eric McGriff, Chief Credit Officer at Everbank Commercial Finance in Parsippany, N.J., reports a similar situation. “I’d say we achieved bottom—the best credit and collec-tions could be—in late 2014 to early 2015,” he says. “Since then, we’ve seen some degree of rising delinquencies and slightly higher charge-offs in a number of segments where the borrowers represent a wide range of small businesses.” 24 MARCH/APRIL 2016 EQUIPMENT LEASING & FINANCE MAGAZINE