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 July was $7.8 billion, up 8 percent from new business volume in July 2013. Month over month, new business volume was down 13 percent from June. Year to date, cumulative new business volume increased 4 percent compared to 2013.
Receivables over 30 days increased from the previous month to 2.7 percent, and were up from 1.5 percent in the same period in 2013. Charge-offs were unchanged for the fourth consecutive month at an all-time low of 0.2 percent.
Credit approvals totaled 79.7 percent in July, a slight decrease from 80.1 percent the previous month. Total headcount for equipment finance companies was up 0.4 percent year over year.
Separately, the Equipment Leasing & Finance Foundation's Monthly Confidence Index (MCI-EFI) for August is 58.9, easing from the previous two months’ indexes of 61.4
ELFA President and CEO William G. Sutton, CAE, said: “After a solid second quarter that saw an overall increase in U.S. GDP and strong business investment, new business volume in the equipment finance sector continued to hold steady in July. Credit performance is mixed: monthly delinquencies were up (as a result of a single respondent-outlier) but charge-offs remained at historically low levels. For now, most ELFA member companies report good, if not spectacular, growth, and conditions appear favorable for this to continue into the late summer and early fall.”
Elaine Temple, President, BancorpSouth Equipment Finance said, “The month-over-month drop in new business volume was expected as business volume is typically lower in July and August. The year-over-year growth of 4 percent is encouraging and reflects that the economy is in a recovery, but a slow recovery.”
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 at http://www.elfaonline.org/Research/MLFI/