ELFA: 44% Y/Y Increase in March New Business Volume

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 March was $6.2 billion, up 44% compared to the same period in 2010. Measured against February volume, March volume increased by 51%.

Credit quality continues to be mixed. Receivables over 30 days increased slightly to 3.5% in March from 3.1% in February, but declined by 17% compared to the same period in 2010. Charge-offs also increased slightly, from 1.0% in February to 1.3% in March, but showed improvement over the same period in 2010.

Compared to the year-earlier period, credit standards eased as new application approvals increased to 77% in March. Fifty percent of participating organizations reported submitting more transactions for approval during the month, down from 61% in February.

Finally, total headcount for equipment finance companies remained flat for the last five months, but was down two percent year-over-year. Supplemental data shows that the construction and trucking sectors continued to lead the under-performing sectors in March.

Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) for April is 70.3, down from 72.4 in March, and up significantly from the April 2010 index of 65.4.

ELFA president and CEO William G. Sutton, CAE, said: “The dramatic increase in new business volume is, in large measure, the result of strong demand in business equipment in various industries and markets. For example, in the technology sector, a number of companies are reporting strong earnings as their business customers decide to replace aging equipment and expand capacity in response to a recovering economy. We see this trend continuing.”

“SG Equipment Finance supports the technology, industrial and transportation sectors. In terms of new business volume we had a very strong first quarter and a record month of March. This is consistent with the MLFI data,” said Larry Scherzer, chief sales officer for SG Equipment Finance based in Jersey City, NJ. “We have seen most of our growth come out of the technology and healthcare sectors, which were resilient throughout the recent economic crisis. We are starting to see signs of recovery in the industrial sector, all of which points to a positive business outlook going into the second half of the year.”

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