Equipment Leasing and Finance Association’s Survey of Economic Activity: Monthly Leasing and Finance Index
July New Business Volume Up Two Percent Year-over-year, Down 22 Percent Month-to-month
The Equipment Leasing and Finance Association’s (ELFA) Monthly Leasing and Finance Index (MLFI-25), which reports economic activity for the $521 billion equipment finance sector, showed overall new business volume for July was $5.7 billion, up two percent from volume of $5.6 billion in the same period in 2010. Compared with June volume of $7.3 billion, July volume decreased by 22 percent. Year to date, new business volume is up 24 percent over last year. However, the percentage of responding companies that experienced a drop in volume from the year earlier period rose to 36 percent.
Credit quality is mixed. Receivables over 30 days increased eight percent to 2.7 percent in July from 2.5 percent in June, but declined by 21 percent compared to the same period in 2010. Charge-offs decreased 37 percent in July from the previous month, and decreased by 50 percent from the same period in 2010.
Credit standards tightened in July as the number of lease applications approved decreased to 76.3 percent from 78.7 percent the previous month. Fifty-nine percent of participating organizations reported submitting more transactions for approval during the month, a decrease from 63 percent in June.
Finally, total headcount for equipment finance companies in July showed no significant change month to month and year over year. Supplemental data show that the construction industry and small and medium-sized enterprises led the underperforming sectors.