The Equipment Leasing and Finance Association’s (ELFA) Monthly Leasing and Finance Index (MLFI-25) (MLFI-25), which reports economic activity from 25 companies representing a cross section of the $903-billion equipment finance sector, showed their overall new business volume for June was $9.5 billion, up 4% from new business volume in June 2014. Volume was up 34% from $7.1 billion in May. Year to date, cumulative new business volume increased 9% compared to 2014.
Receivables over 30 days were 1.1%, unchanged from the previous month and up from 0.9% the same period in 2014. Charge-offs remained at an all-time low of 0.2% for the 16th consecutive month.
Credit approvals totaled 79.4% in June, up slightly from 79.2% in May. Total headcount for equipment finance companies was up 5.2% year over year.
Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) for July is 62.6, remaining essentially the same as the June index of 63.0.
ELFA President and CEO William G. Sutton, CAE, said, “The level of new business volume at the halfway point in the year is higher than in any similar period since at least the Great Recession. In most sectors, ELFA members report robust performance, in terms of both originations and portfolio quality. Tempering this ‘things can’t get much better’ mantra is a realization that various internal and external influences, including a gradually higher interest rate environment domestically and economic woes experienced by our trading partners in the Eurozone and elsewhere, could well slow the trajectory and velocity of capital spending. Time will tell.”
Daniel P. Dyer, Co-founder and Chief Executive Officer, Marlin Business Services Corp., said, “MLFI-25 new business activity indicates choppy but steady growth over this past year. Market and competitive forces are contributing to a multi-year trend toward lower portfolio net margins. Credit performance remains stable and favorable despite the rise in the competitive environment.”
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 at www.elfaonline.org/Data/MLFI/.
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