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 April was $6.1 billion, up 20% from volume of $5.1 billion in the same period in 2011. Volume was down 10% from the previous month. Year-to-date cumulative new business volume is up 17%.

Receivables over 30 days decreased to 2.7% in April, down from 2.8% in March, and down by 18% compared to the same period in 2011. Charge-offs decreased to 0.6%, down from 0.7% the previous month, and down by 25% compared to the same period last year.

Credit approvals decreased to 76% in April from 78% in March. Seventy-six percent of participating organizations reported submitting more transactions for approval during April, up from 67% in March.

Finally, total headcount for equipment finance companies in April increased 0.7% from the previous month, and was down 4.1% year over year. Supplemental data show that the construction and trucking industries continued to lead the underperforming sectors.

Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) for May is 59.2, down slightly from the April index of 62.1, reflecting uncertainty about the pace of U.S. economic growth and concerns about global political and economic factors.

ELFA president and CEO William G. Sutton, CAE, said: “April’s new business volume and credit quality metrics 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 the demand cycle for capital equipment parallels the broader economy in that both continue to strengthen, albeit slowly.”

Judson M. Snyder, president of BMO Harris Equipment Finance Company, headquartered in Milwaukee, WI, said: “We are seeing strong demand for financing in the transportation and energy sectors beginning in the end of 2011 and continuing through April of 2012. Many of these companies postponed replacing equipment during the financial crisis and are faced with the choice of increasing maintenance costs on older equipment or purchasing new. The ongoing historically low interest rate environment has made today an attractive time to replace and finance that equipment. We are also beginning to see requests for equipment relating to expansion and new contracts in the general manufacturing sector. These types of projects are a sign of a firmer economic recovery and we are hopeful that they will continue to develop throughout the summer and fall of 2012.”