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 May was $6.9 billion, down 8 percent from new business volume in May 2013. Month-over-month, new business volume was down 14 percent from April. Year to date, cumulative new business volume increased 3 percent compared to 2013.
Receivables over 30 days were unchanged from the previous month at 2.0 percent, and were up from 1.6 percent from the same period in 2013. Charge-offs were unchanged from the previous two months at an all-time low of 0.2 percent.
Credit approvals totaled 76.1 percent in May, a decrease from 77.4 percent the previous month. Total headcount for equipment finance companies was up 1.0 percent year over year.
Separately, the Equipment Leasing & Finance Foundation's Monthly Confidence Index (MCI-EFI) for June is 61.4, an easing from three consecutive months of two-year high levels which topped at 65.4.
ELFA President and CEO William G. Sutton, CAE, said: “The small decline in new business volume makes the case for a slow recovery in certain sectors of the economy in which equipment financing plays an important role. As noted previously, the momentum created by monthly increases in equipment financings on a consistent basis will be difficult to maintain, particularly as certain segments of the U.S. economy try to regain their footing from the economic downturn experienced a few years ago. It is important to note, however, that cumulative new business volume is still up for the year.”
Daniel McKew, President, Capital One Equipment Finance, said, “While you could look at the collective data reported for the month of May and conclude that there may be an across the board easing in equipment finance, it is so modest that I see it as a minor pause in preparation for the final half of the year that naturally produces more velocity. I am also very encouraged that the Fed’s continued quantitative easing could impact interest rates. Even a modest rise will help the market balance, allow it to arbitrage and create increased velocity.”
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.