Equipment Leasing and Finance Association's Survey of Economic Activity: Monthly Leasing and Finance Index
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 $1 trillion equipment finance sector, showed their overall new business volume for February was $6.1 billion, up 2 percent from new business volume in January. Volume was down 2 percent from $6.2 billion in February 2015. Year to date, cumulative new business volume decreased 7 percent compared to 2015.
Receivables over 30 days were 1.4 percent, up from 1.3 percent the previous month and up from 1.15 percent in the same period in 2015. Charge-offs were 0.37 percent, up from 0.26 percent the previous month.
Credit approvals totaled 79.2 percent in February, up from 78.0 percent in January. Total headcount for equipment finance companies was up 3.0 percent year over year.
Separately, the Equipment Leasing & Finance Foundation's Monthly Confidence Index (MCI-EFI) for March is 51.6, an increase from the February index of 48.3.
ELFA President and CEO Ralph Petta said, "While February origination volume is virtually flat when compared to January and the year-earlier period, credit quality shows signs of deterioration, with delinquencies and charge-offs inching upward over the same time intervals. Both metrics are worth keeping a close eye on as economic uncertainty continues to act as a drag on U.S. businesses' decisions to invest in capital equipment. However, this seems to run counter to the Foundation's Monthly Confidence Index, which increased over the period from February to March."
Dave Fate, President and CEO, Stonebriar Commercial Finance, said, "Trend lines for Q1 2016 are not too dissimilar to 2015; however, we expect commodity driven markets to be even more sensitive in 2016 due to shrinking capital resources, a slowing global economy and a more complex geo-political environment. We continue to see opportunities growing for non-regulated financial institutions operating in this challenging environment, especially leasing opportunities across all asset classes."
About the ELFA's MLFI-25
The MLFI-25 is the only index that reflects capex—the volume of commercial equipment financed in the U.S.—and is released as a complementary economic indicator the day before the U.S. Department of Commerce releases the durable goods report.
To read a detailed description and methodology of the MLFI-25, visit http://www.elfaonline.org/Data/MLFI/.
About the ELFA
The Equipment Leasing and Finance Association (ELFA) is the trade association that represents companies in the $1 trillion equipment finance sector, which includes financial services companies and manufacturers engaged in financing capital goods. ELFA members are the driving force behind the growth in the commercial equipment finance market and contribute to capital formation in the U.S. and abroad. Its more than 575 members include independent and captive leasing and finance companies, banks, financial services corporations, broker/packagers and investment banks, as well as manufacturers and service providers. ELFA has been equipping business for success for more than 50 years. For more information, please visit www.elfaonline.org.
Amy Vogt, Vice President, Communications and Marketing