WASHINGTON, DC (October 25, 2011) - The Equipment Leasing and Finance Association’s (ELFA) Monthly Leasing and Finance Index (MLFI-25), which reports economic activity for the $628 billion equipment finance sector, showed overall new business volume for September was $7.1 billion, up 25 percent from volume of $5.7 billion in the same period in 2010. Volume was also up 25 percent from the previous month. Year-to-date cumulative new business volume is up 25 percent as well.
Credit quality metrics were mixed. Receivables over 30 days decreased to 2.3 percent in September from 2.5 percent in August and declined by 32.4 percent compared to the same period in 2010. However, charge-offs increased 50 percent from August and decreased by 43.8 percent from the same period in 2010.
Credit standards tightened in September as the number of lease applications approved decreased nominally to 76.5 percent from 77.6 percent the previous month. Sixty percent of participating organizations reported submitting more transactions for approval during the month.
Finally, total headcount for equipment finance companies in September showed no significant change month to month and was down 1.4 percent year over year. Supplemental data show that the construction and trucking industries and small- and medium-sized enterprises led the under-performing sectors.
Separately, the Equipment Leasing & Finance Foundation's Monthly Confidence Index (MCI-EFI) for October is 50.7; up from the September index of 47.6. For more detailed information on the MCI-EFI visit www.LeaseFoundation.org.
About the ELFA's MLFI-25
The MLFI-25 is the only index that reflects capex, or the volume of commercial equipment financed in the U.S. The MLFI-25 is released globally at 9 a.m. Eastern time from Washington, D.C., each month, on the day before the U.S. Department of Commerce releases the durable goods report. The MLFI-25 is a financial indicator that complements the durable goods report and other economic indexes, including the Institute for Supply Management Index, which reports economic activity in the manufacturing sector. Together with the MLFI-25 these reports provide a complete view of the status of productive assets in the U.S. economy: equipment produced, acquired and financed.
The MLFI-25 is a time series that reflects two years of business activity for the 25 companies currently participating in the survey. The latest MLFI-25, including methodology and participants is available below and also at http://www.elfaonline.org/ind/research/MLFI/
The ELFA produces the MLFI-25 survey to help member organizations achieve competitive advantage by providing them with leading-edge research and benchmarking information to support strategic business decision making.
The MLFI-25 is a barometer of the trends in U.S. capital equipment investment. Five components are included in the survey: new business volume (originations), aging of receivables, charge-offs, credit approval ratios, (approved vs. submitted) and headcount for the equipment finance business.
The MLFI-25 measures monthly commercial equipment lease and loan activity as reported by participating ELFA member equipment finance companies representing a cross section of the equipment finance sector, including small ticket, middle-market, large ticket, bank, captive and independent leasing and finance companies. Based on hard survey data, the responses mirror the economic activity of the broader equipment finance sector and current business conditions nationally.