ELFA releases November Monthly Leasing and Finance Index.
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Press Release Summary:
According to ELFA's Monthly Leasing and Finance Index, overall new business volume for November was $6.2 billion, up 38% from $4.5 billion in same period in 2010. Volume was up 3% from previous month, and year-to-date cumulative new business volume is up 26%. Receivables over 30 days were lowest in over 2 years, decreasing to 2.0% in November from 2.2% in October. Credit standards remained steady as number of lease applications approved decreased nominally from 76.3% to 76.2%.
Original Press Release:
Equipment Leasing and Finance Association's Survey of Economic Activity: Monthly Leasing and Finance Index
November New Business Volume Up by 38 Percent Year-over-year, Down Three Percent Month-to-month, Up 26 Percent YTD
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 November was $6.2 billion, up 38 percent from volume of $4.5 billion in the same period in 2010. Volume was up three percent from the previous month. Year-to-date cumulative new business volume is up 26 percent.
Credit quality metrics continued to improve. Receivables over 30 days were the lowest in over two years, decreasing to 2.0 percent in November from 2.2 percent in October. Charge-offs were unchanged from the previous month at 0.7 percent.
Credit standards remained steady as the number of lease applications approved decreased nominally to 76.2 percent from 76.3 percent the previous month. 65.5 percent of participating organizations reported submitting more transactions for approval during the month, up from 59 percent the previous month.
Finally, total headcount for equipment finance companies in November was down 0.2 percent month to month and down 1.2 percent year over year. Supplemental data show that the construction and trucking industries led the underperforming sectors.
Separately, the Equipment Leasing & Finance Foundation's Monthly Confidence Index (MCI-EFI) for December is 57.2, down slightly from the November index of 57.4, indicating steadying optimism about business activity despite ongoing concerns about the global economic situation. For more detailed information on the MCI-EFI visit www.LeaseFoundation.org
ELFA President and CEO William G. Sutton, CAE, said: "Virtually all metrics in this month's MLFI point to an industry poised for a breakout performance. While the replacement cycle appears to account for the sharp increase in new business volume, anecdotal and other evidence provided by ELFA members in diverse markets indicates that growth and credit quality continue to gain steam. As we move into 2012, our hope is that the economy will continue its strong recovery."
Irv Rothman, President & CEO, HP Financial Services, located in Berkeley Heights, NJ, said, "The industry continues to experience tremendous growth as enterprise and government entities increasingly opt to leverage available leasing and financing offers to reduce capital expenditures and conserve cash. With business demands and transformative technologies like cloud computing impacting today's technology decisions, we continue to see demand from our customers for the flexible options leasing, financing and lifecycle asset management provides IT."
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 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 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
BancorpSouth Equipment Finance
Bank of America
Bank of the West
BB&T Bank
BMO Harris Equipment Finance Company
Canon Financial Services
Caterpillar Financial Services
CIT
De Lage Landen Financial Services
Dell Financial Services
EverBank Commercial Finance
Fifth Third Equipment Finance Company
First American Equipment Finance
GreatAmerica
Hitachi Credit America
HP Financial Services
Huntington Equipment Finance
John Deere Financial
Key Equipment Finance
M&T Bank
Marlin Leasing
Merchants Capital
PNC Equipment Finance
RBS Asset Finance
SG Equipment Finance
Siemens Financial Services
Stearns Bank
Suntrust
Susquehanna Commercial Finance
US Bancorp Equipment Finance
Verizon Capital
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 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
