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 $1 trillion equipment finance sector, showed their overall new business volume for January was $7.2 billion, up 4% year-over-year from new business volume in January 2018.
“2019 gets off to a strong start in the equipment finance industry, with new business volume increasing 4% over the same period last year,” noted Ralph Petta, ELFA President and CEO. “Credit quality is stable. Business owners continue to expand their operations and acquire productive assets, even as interest rates edge up ever so slightly, with the Fed signaling a cautious wait-and-see posture for additional interest rate hikes this year.”
Volume was down 43% month-to-month from $12.7 billion in December, following the typical end-of-quarter, end-of-year spike in new business activity. Receivables over 30 days were 1.70%, unchanged from the previous month and down from 1.90% the same period in 2018. Charge-offs were 0.35%, down from 0.55% the previous month, and virtually unchanged from the year-earlier period. Credit approvals totaled 76.1% in January, down from 77.9% in December. Total headcount for equipment finance companies was flat year over year.
Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) in February is 56.7, up from the January index of 53.4.
Dave B. Fate, President and CEO, Stonebriar Commercial Finance, commented, “The equipment finance industry remains robust with steady to improving metrics as we start the new year. Multiple factors contributed to an overall positive impact in the markets, including continued strong reported corporate earnings, record low unemployment, strong retail sales, trade talks moving forward in a positive fashion and the Federal Reserve’s significant change in tone. Stonebriar Commercial Finance had its fourth consecutive year since inception of record earnings, originations and no delinquency or credit losses. We enter 2019 with over $1 billion of new business volume in various stages in our pipeline. We remain bullish about the prospects in our industry for 2019.”