Equipment Leasing and Finance Association: June New Business Volume Up 33% Y-O-Y
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 June was $7.3 billion, up 33 percent from volume of $5.5 billion in the same period in 2010. Compared with May volume, June volume increased by 30 percent. Year to date, new business volume is up 28.5 percent over last year.
Credit quality is mixed. Receivables over 30 days decreased 14 percent to 2.5 percent in June from 2.9 percent in May, and declined by 24 percent compared to the same period in 2010. Charge-offs increased 38 percent in June from the previous month, and decreased by 35 percent from the same period in 2010.
Credit standards eased in June as the credit approvals ratio increased to 79 percent from 76 percent the previous month. Sixth-three percent of participating organizations reported submitting more transactions for approval during the month, a decrease from 68 percent in May.
Finally, total headcount for equipment finance companies in June showed no significant change month to month and year over year. Supplemental data shows that the construction and trucking sectors and small and medium-sized enterprises continued to lead the underperforming sectors.
Separately, the Equipment Leasing & Finance Foundation‘s Monthly Confidence Index (MCI-EFI) for July is 56.2, up 6.8 percent from the June index of 52.6. The MLFI-25 is a time series that reflects two years of business activity for the 25 companies currently participating in the survey.
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 versus 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
Canon Financial Services
Caterpillar Financial Services
De Lage Landen Financial Services
Dell Financial Services
EverBank Commercial Finance
Fifth Third Bank
First American Equipment Finance
Hitachi Credit America
HP Financial Services
John Deere Financial
Key Equipment Finance
M&I Equipment Finance
PNC Equipment Finance
RBS Asset Finance
Siemens Financial Services
Susquehanna Commercial Finance
US Bancorp Equipment Finance
Volvo Financial Services
Wells Fargo Equipment Finance