WASHINGTON--(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 August was $6.9 billion, up 21 percent from volume of $5.7 billion in the same period in 2011. Volume was up 5 percent from the previous month. Year-to-date cumulative new business volume increased 16 percent.)--The
Receivables over 30 days decreased for the third consecutive month to 1.9 percent, down from 2.2 percent in July and down 24 percent when compared to the same period in 2011. Charge-offs were unchanged from the previous month at 0.4 percent, and down by 33 percent compared to the same period last year.
Credit approvals decreased slightly to 77.0 percent in August from 77.5 percent in July. Sixty-two percent of participating organizations reported submitting more transactions for approval during August, down from 65.5 percent the previous month.
Finally, total headcount for equipment finance companies was unchanged from the previous month, and declined 3.0 percent year over year.
Separately, the Equipment Leasing & Finance Foundation's Monthly Confidence Index (MCI-EFI) for September is 53.0, up from the August index of 50.2, reflecting increased optimism despite concerns over companies’ willingness to expand their businesses in the face of economic and political uncertainty.
ELFA President and CEO William G. Sutton, CAE, said: “The pace of new equipment financing continued throughout the summer months as the housing sector, for one, showed signs of a rebound. However, businesses, both large and small, continue to build up cash reserves, indicating lingering apprehension over increasing energy prices, instability in the Arab world and a still fragile Eurozone economy.”
Thomas Depping, Chief Executive Officer, Ascentium Capital, said, “The general origination and credit quality trends detailed above mirror our experience at Ascentium Capital. The credit quality of our applications remains unprecedentedly strong and our delinquencies at historic lows. Although we have hedged ourselves against another possible global economic slowdown, we continue to expand our sales force as we have a generally optimistic view of our future. One thing I have learned over the past 30 years in the industry is that being over-capitalized and having substantial excess liquidity is never a bad thing.”
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 $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 550 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.