ELFA releases Monthly Leasing and Finance Index for April.
Share:
Press Release Summary:
According to ELFA's Monthly Leasing and Finance Index, overall new business volume for April was $5.1 billion, up 11% compared to same period in 2010. Compared against March volume, April volume decreased 18%. Receivables over 30 days decreased to 3.3% in April from 3.5% in March, and declined by 9% compared to same period in 2010. Charge-offs also decreased, from 1.3 % in March to 0.8 % in April. New credit application approvals increased slightly to 76% in April from revised 75% in March.
Original Press Release:
Equipment Leasing and Finance Association's Survey of Economic Activity: Monthly Leasing and Finance Index
April New Business Volume Up 11 Percent Year-over-year
Washington, DC, - The Equipment Leasing and Finance Association's (ELFA) Monthly Leasing and Finance Index (MLFI-25), which reports economic activity for the $521 billion equipment finance sector, showed overall new business volume for April was $5.1 billion, up 11 percent compared to the same period in 2010. Compared against March volume, April volume decreased by 18 percent.
Credit quality is improved. Receivables over 30 days decreased to 3.3 percent in April from 3.5 percent in March, and declined by nine percent compared to the same period in 2010. Charge-offs also decreased, from 1.3 percent in March to 0.8 percent in April, and showed improvement over the same period in 2010.
Credit standards remained steady as new application approvals increased slightly to 76 percent in April from a revised 75 percent approval rate in March. Forty-five percent of participating organizations reported submitting more transactions for approval during the month, down from 50 percent in March.
Finally, total headcount for equipment finance companies increased for the first time in six months, and was up one percent year-over-year. Supplemental data shows that the construction and trucking sectors continued to lead the underperforming sectors in April.
Separately, the Equipment Leasing & Finance Foundation's Monthly Confidence Index (MCI-EFI) for May is 63.2, down from the April index of 70.3, indicating a more measured outlook due to the uneven performance in certain sectors. For more detailed information on the MCI-EFI visit www.LeaseFoundation.org
ELFA President and CEO William G. Sutton, CAE, said: "All of April's business performance indicators appear to provide evidence that the equipment finance sector continues to gain momentum. Recent anecdotal information from ELFA members gathering in Washington, D.C., for a series of leadership meetings in mid-May supports the observation that new business activity is strengthening and credit quality improving."
"In line with the MLFI-25 results, there is clearly optimism in most commercial sectors as we move away from the economic pause," said Aylin Cankardes, President, Rockwell Financial Group, located in Centennial, Colo. "We are experiencing a steady pattern of business volume growth in both the renewable space and the manufacturing markets. Credit for capital investments is now more readily available and starting to be deployed. Elevated underwriting standards continue to drive the focus to stronger credits, but with more lending options than over the past couple of years."
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 9 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 latest Monthly Leasing and Finance Index, including methodology and participants is available below and also at www.elfaonline.org/ind/research/MLFI/
MLFI-25 Methodology
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
ADP Credit Corporation
Bank of America
Bank of the West
BB&T
Canon Financial Services
Caterpillar Financial Services Corporation
CIT
De Lage Landen Financial Services
Dell Financial Services
EverBank Commercial Finance
Fifth Third Bank
First American Equipment Finance
GreatAmerica
Hitachi Credit America
HP Financial Services
John Deere Financial
Key Equipment Finance
M&I Equipment Finance
Marlin Leasing Corporation
Merchants Capital
PNC Equipment Finance
RBS Asset Finance
Siemens Financial Services
Stearns Bank
Susquehanna Commercial Finance
US Bancorp
Verizon Capital Corp
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 $521 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 600 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. In 2011, ELFA is celebrating 50 years of equipping business for success. For more information, please visit www.elfaonline.org.
ELFA is the premier source for statistics and analyses concerning the equipment finance sector. Please visit www.elfaonline.org/ind/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 avogt@elfaonline.org