ELFA Index Shows Increase in Capex Financing

November 22, 2019
Logo for ELFA.
ELFA reported October volume of $10 billion.

The volume of financed commercial equipment increased in October, as reflected in the Monthly Leasing and Finance Index (MLFI-25) published by the Equipment Leasing and Finance Association. Volume was $10.1 billion in the month, up 14 percent over October 2018. The association reported year-to-date cumulative new-business volume up 6 percent.

The Equipment Leasing and Finance Foundation’s Monthly Confidence Index (MCI-EFI), a separate index, rose from 51.4 to 54.9 in October.

“Buoyed by solid fundamentals in the U.S. economy, new business volume reported in the October MLFI-25 survey increased yet again,” said ELFA president/CEO Ralph Petta in a prepared statement. “These data, coupled with anecdotal information gathered from members across multiple industry sectors at ELFA’s Annual Convention later in the month, reflect the broader equipment finance industry continuing to fire on most, if not all, cylinders.

“Of some concern is slightly elevated charge-off and delinquency data,” he said. “This bears monitoring as the year comes to a close.”

Robert Neagle, president, merchant finance, Ascentium Capital LLC, said in a statement:

“With predictions that economic growth will hold up through year-end, and an uptick in the Foundation’s Monthly Confidence Index, we should expect business sentiment and investment to continue to spur positive trends for the industry.”

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.

Source: Equipment Leasing and Finance Association