October New Business Unchanged Year-over-year, Down 1 Percent Month-to-month, Up 5 Percent Year-to-date
Washington, DC, November 25, 2013— 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 October was $7.6 billion, unchanged from new business volume in October 2012. Month-over-month, new business volume was down 1 percent from September. Year to date, cumulative new business volume increased 5 percent compared to 2012.
Receivables over 30 days were at 1.5 percent in October, unchanged from September. Delinquencies declined from 1.7 percent in the same period in 2012. Charge-offs were unchanged from the previous two months at 0.4 percent, and only slightly higher than the all-time low of 0.3 percent.
Credit approvals totaled 77.6 percent in October, up slightly from 77.3 percent the previous month. Eighty-two percent of participating organizations reported submitting more transactions for approval during October, a spike from 56 percent in September.
Finally, total headcount for equipment finance companies was up 1 percent year over year.
Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) for November is 56.9, an increase from the October index of 54.0, demonstrating an overall steady industry outlook despite continuing concerns about the U.S. economy and the negative impact of federal government fiscal policies.
ELFA President and CEO William G. Sutton, CAE, said: “As we enter the final quarter of the year, the equipment finance industry continues to perform well, illustrated by healthy new business generation and solid credit quality metrics. We remain cautiously optimistic that business demand for capital equipment will continue unabated into the 4th Quarter, which is a typically strong period for the industry. We hope that the ongoing and unresolved debate over fiscal policy will not act as a drag on the overall economy and the industry as we end 2013 and enter a new year.”
David Mirsky, Chief Executive Officer, Pacific Rim Capital, Inc., said, “The MLFI-25 clearly demonstrates the current slow growth or no growth economy that we are experiencing at the moment. However, the industry remains optimistic based upon the year-to-date growth of 5 percent and the increase in submissions for credit approval. Pacific Rim Capital has experienced slightly stronger growth in its sector and is planning for conservative expansion until the uncertainties in the economy are clarified.”
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-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 below and also at http://www.elfaonline.org/Research/MLFI/
MLFI-25 Methodology
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
- ADP Credit
- BancorpSouth Equipment Finance
- Bank of America
- Bank of the West
- BB&T Bank
- BMO Harris Equipment Finance
- Canon Financial Services
- Caterpillar Financial Services
- CIT
- 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
- GreatAmerica Financial Services
- Hitachi Credit America
- HP Financial Services
- Huntington Equipment Finance
- John Deere Financial
- Key Equipment Finance
- LEAF Commercial Capital
- M&T Bank
- Marlin Leasing
- Merchants Capital
- PNC Equipment Finance
- RBS Asset Finance
- SG Equipment Finance
- Siemens Financial Services
- Stearns Bank
- Suntrust
- Susquehanna Commercial Finance
- US Bancorp Equipment Finance
- Verizon Capital
- Volvo Financial Services
- Wells Fargo Equipment Finance
More at www.elfaonline.org