The Equipment Leasing and Finance Association’s (ELFA) Monthly Leasing and Finance Index, 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 November was $6.6 billion, up 3% from new business volume in November 2012. Month-over-month, new business volume was down 13% from October. Year-to-date, cumulative new business volume increased 5% compared to 2012.
Receivables over 30 days were at 1.8% in November, up slightly from 1.5% in October. Delinquencies declined from 2% in the same period in 2012. Charge-offs declined to once again match the all-time low of 0.3% from 0.4% the previous month.
Credit approvals totaled 76.5% in November, a slight decrease from 77.6% the previous month. Forty-seven percent of participating organizations reported submitting more transactions for approval during October, a level more in line with previous months’ activity after a spike to 82% last month.
Finally, total headcount for equipment finance companies was up 1.4% year over year.
Separately, the Equipment Leasing & Finance Foundation's Monthly Confidence Index (MCI-EFI) for December is 55.8, a decrease from the November index of 56.9, reflecting industry concerns over uncertainty regarding capital expenditures (capex) and competitive market pressures in 2014, among other issues.
ELFA President and CEO William G. Sutton, CAE, said: “Overall new business activity in the equipment finance sector continues to trend positively, despite some softness in November compared to late-summer and early-fall performance. Year-to-date volume also is encouraging as we head into the final month of the year, which is typically a strong period for the sector. Fiscal pressures seem to be dissipating as well with the U.S. Congress agreeing on a two-year budget, which should lessen the chance of any potential government shutdown and provide a measure of comfort to U.S. businesses trying to make planning decisions for the coming year and beyond. Credit quality continues its strong showing, notwithstanding a slight uptick in November delinquencies.”
Christopher Enbom, CEO and Chairman, Allegiant Partners Inc., said, “The continued growth in equipment finance from the previous year shows continued strength in the economy and in equipment spending. The numbers are especially good considering the fact there were fewer working days in November 2013 than 2012. We are expecting a strong 2014 in the small company segment we serve. The budget deal is increasing stability and has boosted our forecast for next year.”