The Equipment Leasing and Finance Association (ELFA) reports that in March new business was $9.1 billion, up 2% year-to-year, 18% month-over-month, and 12% year to date.
ELFA's Monthly Leasing and Finance Index (MLFI-25) reports economic activity from 25 companies representing a cross section of the $1 trillion equipment finance sector.
Receivables over 30 days were 2.00%, up from 1.60% the previous month and up from 1.40% for the same period in 2017. Charge-offs were 0.51%, up from 0.28% the previous month, and down from 0.68% in the year-earlier period.
Credit approvals totaled 75.2% in March, up from 74.2% in February. Total headcount for equipment finance companies was up 0.3% year over year. During 2017, headcount was elevated due to acquisition activity at an MLFI reporting company.
Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) in April is 68.3, down nearly four points from 72.2 in March.
ELFA President and CEO Ralph Petta said, “The first quarter of the year concludes with a continued steady increase in new business growth. Tempering this trend, which reflects sound fundamentals in the overall economy and high business confidence, is the reality that charge-offs and delinquencies are also inching forward, ever so slightly.”
Michael Romanowski, president, Farm Credit Leasing Services Corporation, said, “New business is on parity with 2017, which we will take as a win. Customers are continuing to analyze the impact of tax reform, and in some cases, deciding to delay investment or pay cash for capital expenditures. As the year progresses, we expect many customers to increase their utilization of lease financing as it continues to be an attractive option for the assets that we lease.”
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 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/