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 February was $5.4 billion, up 15% from February 2013. Month over month, new business volume was down 10% from January. Year to date, cumulative new business volume increased 8% compared to 2013.
Receivables over 30 days were unchanged from the previous month at 1.8%. Delinquencies were down from 2.0% during the same period in 2013. Charge-offs were up slightly at 0.4% from the previous three months’ all-time low of 0.3%.
Credit approvals totaled 75.3% of applications in February, a decrease from 76.9%the previous month. Fifty-three percent of participating organizations reported submitting more transactions for approval during February, a decrease from 54% during January.
Finally, total headcount for equipment finance companies was up 4.3%, year over year.
Separately, the Equipment Leasing & Finance Foundation's Monthly Confidence Index (MCI-EFI) for March is 65.1, the highest index in two years and an increase from the February index of 63.3.
ELFA President and CEO William G. Sutton said: “This month’s increase in financing activity reflects a strengthening economy evidenced by a resilient housing market trying to return to pre-recession levels, moderate GDP growth and an improving jobs picture. It is too early to tell whether the positive economic momentum created in the first two months of the year will be sustainable for the balance of 2014, particularly as Fed policy begins to push up long-term interest rates and geopolitical headwinds emerge anew in Eastern Europe. Credit markets continue to perform well.”
Gary Kempinski, general manager of GE Capital Transportation Finance's Navistar Capital program, said “I think the positive new business volume trend for the month, in light of the adverse weather across much of the country, combined with the upward tick in industry employment, signals the strength of our industry. The charge-offs indicated by the MLFI-25 survey are similar to last year’s pattern. When paired with what look like slightly tighter underwriting standards on approvals, I think the industry is acting responsibly to ensure credit stability. Taken together with what we hear from our customers about how well they believe their businesses are performing, I think the MLFI survey indicates equipment customers and financers are feeling pretty good this month.”
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 participants:
ADP Credit
BancorpSouth Equipment Finance
Bank of America
Bank of the West
BB&T Bank
BMO Harris Equipment Finance
Canon Financial Services
Caterpillar Financial Services
CIT
De Lage Landen Financial Services
Dell Financial Services
Direct Capital Corporation
EverBank Commercial Finance
Fifth Third Equipment Finance
First American Equipment Finance, a City National Bank Company
GreatAmerica Financial Services
Hitachi Credit America
HP Financial Services
Huntington Equipment Finance
John Deere Financial
Key Equipment Finance
LEAF Commercial Capital
M&T Bank
Marlin Leasing
Merchants Capital
PNC Equipment Finance
RBS Asset Finance
SG Equipment Finance
Siemens Financial Services
Stearns Bank
Suntrust
Susquehanna Commercial Finance
TCF Equipment Finance
US Bancorp Equipment Finance
Verizon Capital
Volvo Financial Services
Wells Fargo Equipment Finance
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