Equipment and Leasing and Finance Survey shows positive yearly increases.November 26, 2010 -
Reporting economic activity in equipment finance sector, ELFA's Monthly Leasing and Finance Index (MLFI-25) shows overall new business volume for October to be $4.9 billion. This is up 14% compared to same period in 2009 and down 15.5% from September. Year-to-date, new business volume is up 6.0% at $46.1 billion. Credit quality also improved, as receivables over 30 days decreased to 3.0% from 3.4% in September, and losses decreased to 1.2% from prior month. Credit approvals also improved.
Equipment Leasing and Finance Association's 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
USA
Press release date: November 23, 2010
October New Business Volume Up 14 Percent Year-over-year, Down 15.5 Percent Month to Month
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 October was $4.9 billion, up 14 percent compared to the same period in 2009, and down 15.5 percent from September's volume of $5.8 billion.
Year-to-date new business volume is $46.1 billion, up 6.0 percent compared to the cumulative year-to-date total from 2009.
Credit quality is improved. Receivables over 30 days decreased to 3.0 percent in October from 3.4 percent in September, the lowest level in two years. Losses decreased to 1.2 percent in October, down from 1.7 percent in the prior month
The percentage of credit approvals increased a percentage point to 73 percent in October, matching the highest approval ratio (in August 2010) in the last two years. Seventy-four percent of participating organizations reported submitting more transactions for approval during the month, another high mark from the last two years. Finally, total headcount for equipment finance companies was flat from September to October. Year-over-year employment is down six percent. Supplemental data shows that construction and small and medium-sized businesses lead the underperforming sectors.
Separately, the Equipment Leasing & Finance Foundation's Monthly Confidence Index (MCI-EFI) for November is 65.5, an increase from 58.8 in October. For more detailed information on the MCI-EFI visit www.LeaseFoundation.org
ELFA president William G. Sutton said, "We are pleased that all indicators point to an improved equipment finance industry. Hopefully, these positive trends will continue as the broader economy struggles to recover."
"The recovery is progressing slowly; however, the recent MLFI trends are clearly positive," said William Verhelle, Chief Executive Officer of First American Equipment Finance. "Consistent with the larger economy, it appears that commercial equipment finance companies are slow to hire new employees, despite improving industry fundamentals," added Verhelle.
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 http://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 Bancorp South Equipment Finance
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
National City Commercial Corp.
RBS Asset Finance
Regions Equipment Finance
Siemens Financial Services
Stearns Bank
Susquehanna Commercial Finance, Inc.
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. For more information, please visit www.elfaonline.org. Follow ELFA on Twitter @ELFAonline.
ELFA is the premier source for statistics and analyses concerning the equipment finance sector. Please visit http://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
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