ELFA Reports 4% Y/Y Increase in New Business Volume During July

In its Monthly Leasing and Finance Index (MLFI-25), the Equipment Leasing and Finance Association reported overall new business volume for July was $8.2 billion, up 4% year-over-year from new business volume in July 2017. Volume was down 10% month-to-month from $9.1 billion in June. Year to date, cumulative new business volume is up 4% compared to 2017.

“End-of-summer volume remains steady in the face of slowly rising interest rates and trade and tariff concerns in some pockets of the economy. Fundamentals in the economy also remain steady, featuring solid second quarter growth, low unemployment, a gravity-defying equities market and continued optimism in much of the business community borne out of tax legislation enacted last year,” said ELFA President and CEO Ralph Petta. “As we enter the late summer months, industry observers will be keeping a close eye on changes in credit markets as well as a flattening of the yield curve in the broader bond market, either of which could have implications for the economy in general, and the equipment finance space in particular.”

Receivables over 30 days were 1.90%, up from 1.40% the previous month and up from 1.40% the same period in 2017. Charge-offs were 0.31%, down from 0.33% the previous month, and down from 0.35% in the year-earlier period.

Credit approvals totaled 76.2% in July, up from 75.8% in June. Total headcount for equipment finance companies was up 0.6% year-over-year. During 2017, headcount was elevated due to acquisition activity at an MLFI reporting company.

Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) in August is 60.7, easing from the July index of 62.8.

“Over the past five months SunTrust has seen new originations pick up across our lines of business, as companies broadly have adjusted for changes resulting from tax reform. Some companies have expressed concern regarding the impact trade tariffs may have,” said Joe Hines, managing director – head of Direct Originations for SunTrust Equipment Finance & Leasing. “However, we remain optimistic as the outlook for capital expenditure plans over the next 12 months appears robust and new projects are coming online in our markets regularly.”

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