Market Overview

Equipment Leasing and Finance Association's Survey of Economic Activity: Monthly Leasing and Finance Index

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June New Business Volume Down 7 Percent Year-over-year, Up 18
Percent Month-to-Month, Up 4 Percent Year-to-date

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 June was $9.1 billion, down 7 percent year-over-year from new
business volume in June 2017. Volume was up 18 percent month-to-month
from $7.7 billion in May. Year to date, cumulative new business volume
was up 4 percent compared to 2017.

Receivables over 30 days were 1.40 percent, down from 1.60 percent the
previous month and up from 1.30 percent the same period in 2017.
Charge-offs were 0.33 percent, up from 0.31 percent the previous month,
and down from 0.38 percent in the year-earlier period.

Credit approvals totaled 75.8 percent in June, down from 76.8 percent in
May. Total headcount for equipment finance companies was down 0.2
percent 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 July is 62.8, easing from the June index
of 66.2.

ELFA
President and CEO Ralph Petta
said, "Most sectors of the
equipment finance industry are performing well, as the economy's
underlying fundamentals continue to hold up in the face of slowly rising
interest rates. A strong corporate earnings season and continued
strength in the labor markets create a positive environment for capex
spending. Hopefully, potential disruption in the global supply chain
created by frictions with our trading partners does not upend this
positive scenario."

Kris
Snow, President, Cisco Capital
,
said, "The overall equipment
financing industry activity has been strong during the first six months
of 2018. In the technology sector, customers continue to shift their
buying behaviors toward pay-per-use models, cloud-based models and
bundled solutions that may include hardware, software and services. As a
result, we expect captive finance companies to grow in importance as a
strategic underpinning for business and economic growth throughout the
remainder of the year."

About the ELFA's MLFI-25

The MLFI-25 is the only index that reflects capex, or the volume of
commercial equipment financed in the U.S. The MLFI-25 is released
globally at 8 a.m. Eastern time from Washington, D.C., each month on the
day before the U.S. Department of Commerce releases the durable
goods report
. The MLFI-25 is a financial indicator that
complements the durable goods report and other economic indexes,
including the Institute
for Supply Management Index
, which reports economic activity in
the manufacturing sector. Together with the MLFI-25 these reports
provide a complete view of the status of productive assets in the U.S.
economy: equipment produced, acquired and financed.

The MLFI-25 is a time series that reflects two years of business
activity for the 25 companies currently participating in the survey. The
latest MLFI-25, including methodology and participants, is available at www.elfaonline.org/Data/MLFI/

MLFI-25 Methodology

ELFA produces the MLFI-25 survey to help member organizations achieve
competitive advantage by providing them with leading-edge research and
benchmarking information to support strategic business decision making.

The MLFI-25 is a barometer of the trends in U.S. capital equipment
investment. Five components are included in the survey: new business
volume (originations), aging of receivables, charge-offs, credit
approval ratios, (approved vs. submitted) and headcount for the
equipment finance business.

The MLFI-25 measures monthly commercial equipment lease and loan
activity as reported by participating ELFA member equipment finance
companies representing a cross section of the equipment finance sector,
including small ticket, middle-market, large ticket, bank, captive and
independent leasing and finance companies. Based on hard survey data,
the responses mirror the economic activity of the broader equipment
finance sector and current business conditions nationally.

About 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
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. For
more information, please visit www.elfaonline.org.

Follow ELFA:
Twitter: @ELFAonline
LinkedIn: www.linkedin.com/groups?gid=89692
Facebook:
www.facebook.com/ELFApage

ELFA is the premier source for statistics and analyses concerning the
equipment finance sector. Please visit www.elfaonline.org/Data/
for additional information.

The Equipment Leasing & Finance Foundation is a 501c3 non-profit
organization that propels the equipment finance sector—and its
people—forward through industry specific knowledge, intelligence, and
programs that contribute to industry innovation, individual careers, and
the overall betterment of the equipment leasing and finance industry.
The Foundation is funded through charitable individual and corporate
donations. Learn more at www.leasefoundation.org.

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