Equipment Leasing and Finance Association’s Survey of Economic Activity: Monthly Leasing and Finance Index

December New Business Volume Up by 20 Percent Year-over-year, Up 74 Percent Month-to-month, Up 25 Percent Year-end

WASHINGTON--(BUSINESS WIRE)--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 December was $10.8 billion, up 20 percent from volume of $9.0 billion in the same period in 2010. Volume was up 74 percent from the previous month. Cumulative new business volume for 2011 rose 25 percent over 2010.

Credit quality metrics remained relatively steady. Receivables over 30 days rose slightly to 2.1 percent in December from 2.0 percent in November. Charge-offs were unchanged at 0.7 percent for the third consecutive month.

Credit standards eased as the number of lease applications approved increased dramatically to 79.3 percent from 76.2 percent the previous month. 70.8 percent of participating organizations reported submitting more transactions for approval during December, up from 65.5 percent the previous month.

Finally, total headcount for equipment finance companies in December was unchanged month to month and down 1.0 percent year over year. Supplemental data show that the construction and trucking industries again led the underperforming sectors.

Separately, the Equipment Leasing & Finance Foundation's Monthly Confidence Index (MCI-EFI) for January is 59.0, an increase from the December index of 57.2, indicating improved optimism about business activity amid continuing concerns about the global economic situation. For more detailed information on the MCI-EFI visit www.LeaseFoundation.org

ELFA President and CEO William G. Sutton, CAE, said: “The dramatic surge in December new business volume is the result of several factors, which, when combined, form an almost ‘perfect storm’ of unusually strong business activity. First, demand for the lease/finance product increased as businesses replenished their capital equipment stock. Related to this are reports from many ELFA member organizations of a highly competitive pricing environment. In addition, the pick-up in new business volume seems to support recent bank data that suggest that lenders are making more credit available to their commercial and consumer borrowers. Add to the mix a frenetic pace for end-of-quarter, end-of-year closings and the result is a very robust monthly performance.”

David Schaefer, President, Orion First Financial, LLC, located in Gig Harbor, WA, said, “Confidence is on the rise and businesses are beginning to replace aging equipment since they have been holding back over the previous few years. We remain optimistic that equipment replacement will continue but we aren’t certain we have entered an expansion phase across all industries. The equipment leasing and finance industry continues to have access to capital and with rates low, we are well positioned to serve Main Street businesses as demand grows.”

About the ELFA’s MLFI-25

The MLFI-25 is the only index that reflects capex—the volume of commercial equipment financed in the U.S.—and is released as a complementary economic indicator the day before the U.S. Department of Commerce releases the durable goods report.

To read a detailed description and methodology of the MLFI-25, visit http://www.elfaonline.org/ind/research/MLFI/about.cfm

About the ELFA

The Equipment Leasing and Finance Association (ELFA) is the trade association that represents companies in the $628 billion equipment finance sector, which includes financial services companies and manufacturers engaged in financing capital goods. ELFA members are the driving force behind the growth in the commercial equipment finance market and contribute to capital formation in the U.S. and abroad. Its over 600 members include independent and captive leasing and finance companies, banks, financial services corporations, broker/packagers and investment banks, as well as manufacturers and service providers. ELFA has been equipping business for success. For more information, please visit www.elfaonline.org.