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

August New Business Volume Up 13 Percent Year-over-year, Down 9 Percent Month-to-month, Up 6 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 $827 billion equipment finance sector, showed their overall new business volume for August was $7.2 billion, up 13 percent from new business volume in August 2013. Month over month, new business volume was down 9 percent from July. Year to date, cumulative new business volume increased 6 percent compared to 2013.

Receivables over 30 days increased from the previous month to 1.3 percent, and were up from 1 percent in the same period in 2013. Charge-offs were unchanged for the fifth consecutive month at an all-time low of 0.2 percent.

Credit approvals totaled 79.5 percent in August, a slight decrease from 80.3 percent the previous month. Total headcount for equipment finance companies was up 1 percent year over year.

Separately, the Equipment Leasing & Finance Foundation's Monthly Confidence Index (MCI-EFI) for September is 60.2, an increase from the previous month’s index of 58.9.

ELFA President and CEO William G. Sutton, CAE, said: “Continued strength in new business volume reflects the uptick in overall economic activity most economists forecast for the second half of 2014. Solid fundamentals—modest GDP growth; an improving labor market; increased consumer spending, as evidenced by strong auto sales; and low interest rates—all bode well for continued business investment in general, and the equipment finance sector, in particular. Credit quality appears manageable as well, although the index shows a slight uptick in delinquencies. Tempering this relatively good news is concern over recent geopolitical events relating to the fight against terrorism.”

Larry R. Stevens, President and Chief Executive Officer, Med One Capital, said, “The YTD-2014 metric measured by the MLFI-25 demonstrates a solid year in the equipment finance industry. If the month-to-month trends continue for the remainder of 2014, our industry will experience the strongest new business performance since well before the beginning of the recession. The industry seems to have recovered much of the strength and momentum that was lost during the financial meltdown and resultant uncertainties experienced in 2009 and 2010. This trend is largely consistent with what we are experiencing in healthcare equipment financing. The high quality reflected in the portfolios of the reporting companies demonstrates that in the face of increasing volume, credit quality remains a high priority within our industry. If this continues, it will serve us well as pressure grows to increase new business volumes in the years ahead.”

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 $827 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

Equipment Leasing and Finance Association (ELFA)
Amy Vogt
Vice President, Communications and Marketing
202-238-3438
avogt@elfaonline.org

Contacts

Equipment Leasing and Finance Association (ELFA)
Amy Vogt
Vice President, Communications and Marketing
202-238-3438
avogt@elfaonline.org