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 overall new business volume for June was $9 billion, up 5 percent from June 2013. Month over month, new business volume was up 30 percent from May. Year to date, cumulative new business volume increased 3 percent compared to 2013.
Receivables over 30 days decreased from the previous month at 1.6 percent, and were up from 1.4 percent in the same period in 2013. Charge-offs were unchanged for the third consecutive month at an all-time low of 0.2 percent.
Credit approvals totaled 80.1 percent in June, an increase from 76.1 percent the previous month. Total headcount for equipment finance companies was up 1.0 percent year over year.
Separately, the Equipment Leasing & Finance Foundation's Monthly Confidence Index (MCI-EFI) for July is 61.4, unchanged from the previous month.
“New business volume shows steady year-over-year growth as businesses continue to invest in plant and equipment," said ELFA President and CEO William G. Sutton, CAE. "It remains to be seen whether and to what extent the Fed’s recent stance toward a gradually tightened monetary policy and resultant increase in short- and long-term rates in the coming months is providing a stimulus for this rise in capital expenditure (CAPEX).”
“Although May's MLFI showed a modest decline in new business volume, most industry experts would have expected the stronger results reported in June. In reviewing the MLFI year-over-year comparison, all of the quarter results are strongest in the last month of each quarter. Two things need to happen to help our industry grow and prosper," said Edward Dahlka, President, Cole Taylor Equipment Finance. "The Fed needs to let interest rates rise (which favors a fixed rate product) and lenders need to remain firm on credit quality. The equipment finance industry has a strong marketing culture and most of us believe that if we continue to see even a modest increase in capital expenditures our industry could enjoy a stronger increase in new business volume over the last two quarters. Let’s all hope that happens.”