Economic activity on the rise
Washington, DC--The Equipment Leasing and Finance Association's (ELFA) ‘Monthly Leasing and Finance Index’ (MLFI-25), which reports economic activity from 25 companies representing a cross section of the $827 billion equipment finance sector, showed their overall new business volume for September was $9.4 billion, up 21 per cent from new business volume in September 2013. Month over month, new business volume was up 31 per cent from August. Year-to-date, cumulative new business volume increased eight per cent compared to 2013.
Receivables over 30 days decreased from the previous month to one per cent, and were up slightly from .09 per cent in the same period in 2013. Charge-offs were unchanged for the sixth consecutive month at an all-time low of 0.2 per cent.
Credit approvals totaled 79.7 per cent in September, relatively unchanged from the previous month. Total headcount for equipment finance companies was up 1.1 per cent year over year.
Separately, the Equipment Leasing & Finance Foundation's ‘Monthly Confidence Index’ (MCI-EFI) for October is 60.4, slightly better than the September index of 60.2, with survey participants indicating increasing or consistent demand tempered by U.S. economic concerns
ELFA President and CEO William G. Sutton, CAE, says: "All MLFI-25 performance metrics for September indicate a favorable environment for business investment. Strong originations and solid portfolio performance, together with a slight uptick in hiring, all point to a robust equipment finance sector as we move into the final quarter of the year. We will keep our eye on these positive indicators as the U.S. economy continues to react to geopolitical events, a worrisome global economic outlook and volatile U.S. equity markets."
William Henak, president and chief executive officer, TCF Equipment Finance, says, "Continued growth in September quarter-end new business volume was both expected and encouraging based on the year-to-date momentum and historically strong performance for this period in the equipment finance sector. The decrease in portfolio delinquency levels back to the one per cent level in September was a positive sign, yet the 1.3 per cent spike in August was a good reminder that strong credit discipline remains important in this competitive environment as everyone looks to grow portfolios. Concern for the rest of the year remains due to the growing number of negative news headlines, volatile capital and equity markets, unresolved tax extender legislation, and the potential for Federal Reserve actions that may influence interest rates. All of these factors could negatively impact new business volume in the fourth quarter, which is historically strong. Despite these concerns, this year is expected to finish strong. Our industry has always been very resilient and found ways to turn uncertainty into opportunity."