ELFA: May Index Shows Y/Y Volume Increase of 10%

The Equipment Leasing and Finance Association’s Monthly Leasing and Finance Index, which reports economic activity from 25 companies representing a cross section of the $903 billion equipment finance sector, showed their overall new business volume for May was $7.1 billion, up 1% from new business volume in May 2014. Volume was down 13% from $8.2 billion in April.  Year to date, cumulative new business volume increased 10% compared to 2014.  

Receivables over 30 days were 1.1%, up from 0.9% the previous month and from 1% the same period in 2014. Charge-offs remained at an all-time low of 0.2% for the 15th consecutive month.

Credit approvals totaled 79.2% in May, up from 78.7% in April. Total headcount for equipment finance companies was up 4.7% year over year. Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) for June is 63.0, easing from the May index of 67.5.

ELFA president and CEO William G. Sutton said: “New business volume continues to hold its own in the equipment finance sector, despite the modest April to May decline. Although members report strong activity in certain markets, some business owners continue to take a wait-and-see attitude before investing in new plant and equipment, as the Fed considers when to tighten monetary policy, which will lead to higher interest rates. Nevertheless, a double-digit increase in cumulative new business volume for the year is indicative of the sector’s strength. Portfolios continue to perform well and member companies appear to be in a hiring mode, as headcount is up for the month.”   

“MLFI-25 new business volume suggests continued growth for the equipment leasing and finance industry. Charge offs and delinquency remain at historic lows and hiring in 2015 has been robust,” Andrew Bender, CEO, GSG Financial, said. “Industry players are bullish and competition will remain tough, but these are all positive indicators as end users plan for year-end capital acquisitions. Things could get interesting if the Fed impacts buying behavior across rate-sensitive sectors or if Congress extends bonus depreciation or enacts other tax reform. With an eye on global economic disruptions, I am optimistic, but cautious.”

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