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

April New Business Up 23 Percent Year-over-year, Up 10 Percent Month-to-month

WASHINGTON--()--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 their overall new business volume for April was $7.5 billion, up 23 percent compared to volume in April 2012. Month-over-month, new business volume was up 10 percent from March. Year to date, cumulative new business volume was up eight percent compared to 2012.

Receivables over 30 days were unchanged in April from the previous two months at 2.0 percent. They were down from 2.7 percent in the same period in 2012. Charge-offs were unchanged from March at the all-time low of 0.3 percent.

Credit approvals totaled 77.2 percent in April, down from 78.4 percent in March. Seventy-two percent of participating organizations reported submitting more transactions for approval during April, up 50 percent from the previous month.

Finally, total headcount for equipment finance companies was up three percent from the previous month, and was unchanged year over year.

Separately, the Equipment Leasing & Finance Foundation's Monthly Confidence Index (MCI-EFI) for May is 56.7, an increase from the April index of 54.0, reflecting industry participants’ increasing optimism despite continuing concerns over the economy and the impact of federal policies on capital expenditures.

ELFA President and CEO William G. Sutton, CAE, said: “Both performance indices—the MCI as an indicator of future optimism about the direction of the U.S. economy, and the MLFI-25’s growth trend in new business activity—provide solid evidence that the demand side of the capital investment equation continues to pick up as the broader economy strengthens. It is our hope that this trend pushes into the second half of the year.”

Paul J. Menzel, President and CEO, Financial Pacific Leasing, LLC, said: "Over the last four years businesses of all sizes have pursued a defensive strategy of austerity by right sizing their balance sheets, maximizing operating efficiencies, and optimizing cash flow, all while top line revenue growth has remained weak. This has kept many borrowers and lessees on the sidelines despite historically low rates. The anemic revenue story may be coming to an end as businesses seem to be going on the offensive and investing for growth, as this month’s MLFI data reflects."

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/Research/MLFI.

About the ELFA

The Equipment Leasing and Finance Association (ELFA) is the trade association that represents companies in the $725 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 more than 575 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 than 50 years. For more information, please visit www.elfaonline.org.

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Contacts

ELFA
Amy Vogt, Vice President, Communications and Marketing
202-238-3438
avogt@elfaonline.org.

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Contacts

ELFA
Amy Vogt, Vice President, Communications and Marketing
202-238-3438
avogt@elfaonline.org.