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

September New Business Volume Up 12 Percent Year-over-year, 22 Percent Month-to-month and Down 4 Percent Year-to-date

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 $1 trillion equipment finance sector, showed their overall new business volume for September was $9.4 billion, up 12 percent year-over-year from new business volume in September 2015. Volume was up 22 percent month-to-month from $7.7 billion in August. Year to date, cumulative new business volume decreased 4 percent compared to 2015.

Receivables over 30 days were 1.31 percent, relatively unchanged from the previous month and up from 1.10 percent in the same period in 2015. Charge-offs were 0.46 percent, up from 0.44 percent the previous month.

Credit approvals totaled 76.6 percent in September, down slightly from 76.9 percent in August. Total headcount for equipment finance companies was up 3.8 percent year over year.

Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) for October is 56.0, an increase from the September index of 53.8.

ELFA President and CEO Ralph Petta said, “September new business volume was strong, showing the first double-digit increase in many months. Perhaps the Fed’s decision to keep interest rates low has contributed to this favorable environment for equipment investment by businesses. The uncertainty caused by the upcoming Presidential election, which has acted as a drag on overall economic growth and low capital spending for most of this year, seems to have waned—at least in the short-term. It will be interesting to see if this scenario continues into the final quarter of 2016.”

Stan Walker, Managing Director, JPMorgan Equipment Finance, said, “The September MLFI-25 data reflected a nice bump in volume activity, although it’s yet to be seen if this is a trend or an anomaly. The lingering uncertainty around interest rate hikes and the upcoming presidential election have left many companies reluctant to move forward on capex spend, so this is definitely welcome news. Despite the unclear environment, our firm has seen strong volume growth for the year and our portfolio credit metrics remain solid. As we head through the fourth quarter there’s definite pent up demand for capital equipment investment, but given the unpredictable domestic environment along with the economic headwinds internationally, we may continue to see this unevenness for several more months.”

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/Data/MLFI/

About the ELFA

The Equipment Leasing and Finance Association (ELFA) is the trade association that represents companies in the $1 trillion 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

Contacts

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