Equipment Leasing and Finance Association

Equipment Finance Sector See Double Digit Drop in New Business Volume in July

The Equipment Leasing and Finance Association’s (ELFA) Monthly Leasing and Finance Index (MLFI-25), which reports economic activity from 25 companies representing a cross section of the $725 billion equipment finance sector, showed the overall new business volume for July was $7.2 billion, up 9 percent compared to volume in July 2012. Month-over-month, new business volume was down 16 percent from June. Year to date, cumulative new business volume increased 10 percent compared to 2012.

Receivables over 30 days were at 1.5 percent in July, up slightly from the historic low of 1.4 percent in June. Delinquencies declined from 2.2 percent in the same period in 2012. Charge-offs were unchanged for the past five months at the all-time low of 0.3 percent.

Credit approvals totaled 78.6 percent in July, relatively unchanged from the previous two months. Fifty-eight percent of participating organizations reported submitting more transactions for approval during July, up from 54 percent the previous month.

Finally, total headcount for equipment finance companies was up 1 percent year over year.

Separately, the Equipment Leasing & Finance Foundation's Monthly Confidence Index (MCI-EFI) for August is 61, up for the fourth consecutive month and an increase from the July index of 59.4.

“The amount of new business financed during the spring and summer months continues to grow at a moderate pace. While cooling off somewhat from a torrid June, this month’s increase in financing activity matches a strengthening economy evidenced by a rebounding housing market, GDP growth and declining unemployment picture," said ELFA President and CEO William G. Sutton, CAE. "Credit markets also continue to perform well. These data points bode well for additional investment in capital equipment and an expanding U.S. economy. It will be interesting to see if this positive trend holds up as we move into late-summer and fall.”

"The MLFI-25 leasing volume is up 10 percent year to date, with minimal change in participants’ risk appetite. Aggregate delinquency and charge-off metrics are good indicators of a stable economic business environment," said William Houston, Senior Director, Corporate Administration, Canon Financial Services, Inc. "The data suggests the equipment leasing industry continues to enjoy strong new lease growth and healthy portfolios.”

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