ELFA's MLFI-25 for September shows new business volume increases.October 25, 2012 -
ELFA's Monthly Leasing and Finance Index (MLFI-25) for September shows overall new business volume up 16% from 2011, up 19% from August, and up 16% year-to-date. While receivables over 30 days decreased to 1.8% from 1.9% in August and were down 22% compared to 2011, charge-offs were up from August at 0.5% and down 44% compared to 2011. Credit approvals increased to 79.6%, and 54% of participants reported submitting more transactions for approval during September (down from 65% in August).
Survey of Economic Activity: Monthly Leasing and Finance Index
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Equipment Leasing and Finance Association
1825 K Street NW
Washington, DC, 20006
Press release date: October 24, 2012
September New Business Volume Up by 16 Percent Year-over-year, 19 Percent Month-to-month, 16 Percent Year-to-date
Washington, DC – The Equipment Leasing and Finance Association’s (ELFA) Monthly Leasing and Finance Index (MLFI-25), which reports economic activity for the $628 billion equipment finance sector, showed overall new business volume for September was $8.2 billion, up 16 percent from volume of $7.1 billion in the same period in 2011. Volume was up 19 percent from the previous month. Year-to-date cumulative new business volume increased 16 percent.
Receivables over 30 days decreased for the fourth consecutive month to 1.8 percent, down from 1.9 percent in August and down 22 percent when compared to the same period in 2011. Charge-offs were up slightly from the previous month at 0.5 percent, and down by 44 percent compared to the same period last year.
Credit approvals increased to 79.6 percent in September from 77.0 percent in August. Fifty-four percent of participating organizations reported submitting more transactions for approval during September, down from 65 percent the previous month.
Finally, total headcount for equipment finance companies was down 0.5 percent from the previous month, and declined 3.2 percent year over year.
Separately, the Equipment Leasing Finance Foundation's Monthly Confidence Index (MCI-EFI) for October is 53.3, relatively unchanged from the September index of 53.0, reflecting steady industry confidence despite economic, political and regulatory concerns.
ELFA President and CEO William G. Sutton, CAE, said: “While September’s sharp increase in new business volume is indeed encouraging, some equipment finance markets continue to show some softness. Also, the run-up to the U.S. elections, high energy prices and continuing uncertainty brought about by fragile European economies is muting what might be an otherwise robust recovery for the U.S. economy.”
“Double digit improvement in several index categories is certainly a good sign for our industry," said William Stephenson, Chairman, Global Vendor Finance, De Lage Landen International B.V. “The improvement trend in these fundamental industry metrics reflects a relatively stable but cautionary outlook for the future.”
About the ELFA’s MLFI-25
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 below and also at http://www.elfaonline.org/Research/MLFI/
The ELFA produces the MLFI-25 survey to help member organizations achieve competitive advantage by providing them with leading-edge research and benchmarking information to support strategic business decision making.
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.
ELFA MLFI-25 Participants
BancorpSouth Equipment Finance
Bank of America
Bank of the West
BMO Harris Equipment Finance
Canon Financial Services
Caterpillar Financial Services
De Lage Landen Financial Services
Dell Financial Services
Direct Capital Corporation
EverBank Commercial Finance
Fifth Third Equipment Finance
First American Equipment Finance, a City National Bank Company
Hitachi Credit America
HP Financial Services
Huntington Equipment Finance
John Deere Financial
Key Equipment Finance
PNC Equipment Finance
RBS Asset Finance
SG Equipment Finance
Siemens Financial Services
Susquehanna Commercial Finance
US Bancorp Equipment Finance
Volvo Financial Services
Wells Fargo Equipment Finance
About the ELFA
The Equipment Leasing and Finance Association (ELFA) is the trade association that represents companies in the $628 billion 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 over 550 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.
ELFA is the premier source for statistics and analyses concerning the equipment finance sector. Please visit http://www.elfaonline.org/Research/ for additional information.
The Equipment Leasing & Finance Foundation is the non-profit affiliate to the Equipment Leasing and Finance Association, providing future-focused research to the equipment finance industry. For more information please visit the website at www.leasefoundation.org
Media/Press Contact: Amy Vogt, Vice President, Communications and Marketing, ELFA, 202-238-3438 or firstname.lastname@example.org