The Current Equipment Leasing and Finance Association’s Survey of Economic Activity: Monthly Leasing and Finance Index22 May, 2014
Washington, DC, May 22, 2014— 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 April was $8 billion, up 7 percent from new business volume in April 2013. Month-over-month, new business volume was up 14 percent from March. Year to date, cumulative new business volume increased 6 percent compared to 2013.
Receivables over 30 days decreased to 2.0 percent from 2.1 percent the previous month, and were flat with the same period in 2013.
Charge-offs were unchanged from the previous month at an all-time low of 0.2 percent.
Credit approvals totaled 77.4 percent in April, a slight decrease from 77.8 percent the previous month. Forty-four percent of participating organizations reported submitting more transactions for approval during April, a decrease from 65 percent during March.
Finally, total headcount for equipment finance companies was up 2.0 percent year over year. This result is more line with industry employment trends than the previous two months’ year-over-year increases, which reflected a rebounding from large decreases the prior year.
Separately, the Equipment Leasing & Finance Foundation's Monthly Confidence Index (MCI-EFI) for May is 65.4—relatively unchanged from 65.1 in April—the highest index level in two years for the third consecutive month.
ELFA President and CEO William G. Sutton, CAE, said: “After a relatively soft first quarter, new business volume picked up steam in April. Equipment finance companies are taking advantage of abundant, available liquidity. This, coupled with a very competitive marketplace, is creating favorable conditions for end-users to invest in capital assets to continue adding capacity to their business operations. Equipment finance and leasing companies also report continued high-quality portfolios, for the most part, which is a result of an improving economy.”
Shad Peterson, President and Chief Operating Officer, Sasser Family Holdings, Inc., said, “Continual positive new business volume coming out of one of the worst first quarter deep freezes, in addition to stronger receivables and historic low charge-offs as indicated in the MLFI-25, signal continued strength within the equipment leasing and finance industry. If the industry can continue to maintain prudent and forward-looking credit decisions along with a measured fiscal policy by the Federal Reserve, 2014 into 2015 looks to be very positive for growth in our industry.”
About the ELFA’s MLFI-25
The MLFI-25 is the only index that reflects capex, or the volume of commercial equipment financed in the U.S. The MLFI-25 is released globally at 8 a.m. Eastern time from Washington, D.C., each month on the day before the U.S. Department of Commerce releases the durable goods report. The MLFI-25 is a financial indicator that complements the durable goods report and other economic indexes, including the Institute for Supply Management Index, which reports economic activity in the manufacturing sector. Together with the MLFI-25 these reports provide a complete view of the status of productive assets in the U.S. economy: equipment produced, acquired and financed.
The MLFI-25 is a time series that reflects two years of business activity for the 25 companies currently participating in the survey. The latest MLFI-25, including methodology and participants is available below and also at http://www.elfaonline.org/Research/MLFI/
The ELFA produces the MLFI-25 survey to help member organizations achieve competitive advantage by providing them with leading-edge research and benchmarking information to support strategic business decision making.
The MLFI-25 is a barometer of the trends in U.S. capital equipment investment. Five components are included in the survey: new business volume (originations), aging of receivables, charge-offs, credit approval ratios, (approved vs. submitted) and headcount for the equipment finance business.
The MLFI-25 measures monthly commercial equipment lease and loan activity as reported by participating ELFA member equipment finance companies representing a cross section of the equipment finance sector, including small ticket, middle-market, large ticket, bank, captive and independent leasing and finance companies. Based on hard survey data, the responses mirror the economic activity of the broader equipment finance sector and current business conditions nationally.
ELFA MLFI-25 Participants
BancorpSouth Equipment Finance
Bank of America
Bank of the West
BMO Harris Equipment Finance
Canon Financial Services
Caterpillar Financial Services
De Lage Landen Financial Services
Dell Financial Services
Direct Capital Corporation
EverBank Commercial Finance
Fifth Third Equipment Finance
First American Equipment Finance, a City National Bank Company
GreatAmerica Financial Services
Hitachi Credit America
HP Financial Services
Huntington Equipment Finance
John Deere Financial
Key Equipment Finance
LEAF Commercial Capital
PNC Equipment Finance
RBS Asset Finance
SG Equipment Finance
Siemens Financial Services
Susquehanna Commercial Finance
TCF Equipment Finance
US Bancorp Equipment Finance
Volvo Financial Services
Wells Fargo Equipment Finance
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 580 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. For more information, please visit www.elfaonline.org.