Equipment Leasing and Finance Association’s Survey of Economic Activity: Monthly Leasing and Finance Index
July New Business Volume Up by 16 Percent Year-over-year, Down 18 Percent Month-to-month, Up 15 Percent Year-to-date
Washington, DC, August 23, 2012— The 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 July was $6.6 billion, up 15.8 percent from volume of $5.7 billion in the same period in 2011. Volume was down 17.5 percent from the previous month. Year-to-date cumulative new business volume increased 14.7 percent.
Receivables over 30 days were 2.2 percent, down from 2.4 percent in June, and down slightly when compared to the same period in 2011. Charge-offs decreased to 0.4 percent in July, down from 0.6 percent the previous month, and down by 43 percent compared to the same period last year.
Credit approvals decreased to 77.5 percent in July from 78.7 percent in June. Sixty-five percent of participating organizations reported submitting more transactions for approval during July, unchanged from the previous month.
Finally, total headcount for equipment finance companies decreased slightly from the previous month, and declined 2.8 percent year over year. Supplemental data show that again trucking and construction led the underperforming sectors, followed by small and medium-sized enterprises.
Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) for August is 50.2, down from the July index of 51.5, reflecting ongoing industry concerns over economic, regulatory and political uncertainty.
ELFA President and CEO William G. Sutton, CAE, said: “Despite well publicized fiscal challenges presented by the Eurozone debt crisis, a recent uptick in global oil prices, and a stubbornly sluggish U.S. economy, business financing of capital equipment continues to show some strength. Portfolio quality is steadily improving and the number of favorable business credit decisions remains relatively stable, at least throughout the summer’s early months.”
Daniel P. Dyer, Co-founder & Chief Executive Officer, Marlin Business Services Corp, said, “As noted in July MLFI data, asset quality, hiring and origination volume trends reflect the ongoing sluggishness to the overall economy. Election year uncertainty coupled with burdensome regulations add to the unrest many companies are facing at this time.”
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-25these 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
Hitachi Credit America
HP Financial Services
Huntington Equipment Finance
John Deere Financial
Key Equipment Finance
PNC Equipment Finance
RBS Asset Finance
SG Equipment Finance
Siemens Financial Services
Susquehanna Commercial 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 $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.
ELFA is the premier source for statistics and analyses concerning the equipment finance sector. Please visithttp://www.elfaonline.org/Research/ for additional information.
The Equipment Leasing & Finance Foundation is the non-profit affiliate to the Equipment Leasing and Finance Association, providing future-focused research to the equipment finance industry. For more information please visit the website at www.leasefoundation.org