The latest monthly report from the Equipment Leasing and Finance Association (ELFA) shows that new business in March was up 30% over February, up 6% year to date, and up 3% versus March of 2013.
The report is based on the economic activity of 25 companies representing a cross section of the $827-billion equipment finance sector.
Receivables over 30 days grew to 2.1%, compared with 1.8% the previous month. They were also up slightly from 2.0% during the same period in 2013. Charge-offs were down at a new all-time low of 0.2%, compared to 0.4% the previous month.
Credit approvals totaled 77.8% in March, an increase from 75.3% the previous month. Some 65% of participating organizations reported submitting more transactions for approval during March, an increase from 53% during February.
Total headcount for equipment finance companies was up 4.4%, year over year.
Separately, the Equipment Leasing & Finance Foundation's Monthly Confidence Index for April is 65.1. It is the second consecutive month that confidence has remained at the highest level in two years.
ELFA President and CEO William G. Sutton, CAE, said: “Equipment finance companies in almost all industry sectors are reporting a strong first quarter of the year. The March data showing new business volume clearly provides evidence of a strong first quarter looking back and a positive forecast for future activity. The Federal Reserve recently hinted at continuing a monetary policy that will promote a sustained low interest rate environment at least for the foreseeable future, which is giving the business community a reason to feel confident about the overall trajectory of the U.S. economy and make capital investments in their businesses. Credit quality metrics are mixed, with delinquencies edging upward counterbalanced by monthly losses reaching historic lows. Another positive sign for the industry is the trend toward increased hiring during the past 10 months.”
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.
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