WASHINGTON–(BUSINESS WIRE)–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 $ 1 trillion equipment finance sector, showed their overall new business volume for May was $ 7.7 billion, up 13 percent year-over-year from new business volume in May 2016. Volume was down 3 percent month-to-month from $ 7.9 billion in April. Year to date, cumulative new business volume was up 7 percent compared to 2016.
Receivables over 30 days were 1.40 percent, up from 1.30 percent the previous month and up from 1.30 percent in the same period in 2016. Charge-offs were 0.47 percent, up from 0.38 percent the previous month, and up from 0.33 percent in the year-earlier period.
Credit approvals totaled 77 percent in May, up from 75.9 percent in April. Total headcount for equipment finance companies was up 15.4 percent year over year, largely attributable to continued acquisition activity at an MLFI reporting company.
Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) for June is 63.5, steady with the May index of 63.2.
ELFA President and CEO Ralph Petta said, “Origination volume for the month of May continues strong second quarter performance for the equipment finance industry. Although certain verticals and industry sectors are performing better than others, overall demand for capital equipment continues the positive momentum begun in the first few months of the year. At the same time, credit quality remains in acceptable ranges. While the data provide a rear-view mirror glimpse of industry health, more telling will be the impact of rising interest rates, warmer summertime weather and whether policy makers in Washington succeed in making progress on important legislative matters that benefit the business community.”
“The current business environment is perplexing. While the U.S. economy is experiencing the third longest expansion in history, there have not been any sustained pockets of robust growth. Confidence levels are still very encouraging, as businesses continue to invest and finance equipment and related services at stronger levels than in 2016,” said Adam D. Warner, President of Key Equipment Finance. “It is critically important to watch all economic indicators and the Foundation-Keybridge U.S. Equipment & Software Investment Momentum Monitor to choose which verticals provide the best opportunity for growth with appropriate levels of risk. With rising interest rates forecast for the remainder of the year, we expect some margin compression relief with minimal impact on new financing activity.”
About the ELFA’s MLFI-25
The MLFI-25 is the only index that reflects capex—the volume of commercial equipment financed in the U.S.—and is released as a complementary economic indicator the day before the U.S. Department of Commerce releases the durable goods report.
To read a detailed description and methodology of the MLFI-25, visit http://www.elfaonline.org/Data/MLFI/
About the ELFA
The Equipment Leasing and Finance Association (ELFA) is the trade association that represents companies in the $ 1 trillion equipment finance sector, which includes financial services companies and manufacturers engaged in financing capital goods. ELFA members are the driving force behind the growth in the commercial equipment finance market and contribute to capital formation in the U.S. and abroad. Its more than 575 members include independent and captive leasing and finance companies, banks, financial services corporations, broker/packagers and investment banks, as well as manufacturers and service providers. ELFA has been equipping business for success for more than 50 years. For more information, please visit www.elfaonline.org.
The Equipment Leasing & Finance Foundation is a 501c3 non-profit organization dedicated to inspiring thoughtful innovation and contributing to the betterment of the equipment leasing and finance industry. Funded through charitable individual and corporate donations, the Foundation focuses on the development of in-depth, independent research and resources for the advancement of equipment finance industry knowledge. Visit the Foundation online to get the most current version of the Monthly Confidence Index and Foundation-Keybridge U. S. Equipment & Software Investment Momentum Monitor.