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Equipment Leasing and Finance Association’s Survey of Economic Activity: July 2015 Leasing and Finance Index

Friday, August 28, 2015

July New Business Volume Up 4 Percent Year-over-year,
Down 14 Percent Month-to-month, Up 8 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 $903 billion equipment finance sector, showed their overall new business volume for July was $8.2 billion, up 4 percent from new business volume in July 2014. Volume was down 14 percent from $9.5 billion in June. Year to date, cumulative new business volume increased 8 percent compared to 2014.

Receivables over 30 days were 1.0 percent, down slightly from 1.1 percent the previous month and unchanged from the same period in 2014. Charge-offs remained at an all-time low of 0.2 percent for the 17th consecutive month.

Credit approvals totaled 79.0 percent in July, down slightly from 79.4 percent in June. Total headcount for equipment finance companies was up 5.4 percent year over year.

Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) for August is 67.4, an increase from the July index of 62.6.

ELFA President and CEO William G. Sutton, CAE, said, “The consensus forecast for the second half of 2015 is for the U.S. to show modest, if not robust, economic growth. July MLFI-25 data provide evidence of this narrative, in terms of originations, credit quality and headcount. Despite economic headwinds in parts of Europe and China, as well as constant chatter about a looming interest rate hike by the Fed, U.S. businesses in many sectors are investing steadily in productive assets, in the process relying on financing solutions for these equipment acquisitions. Hopefully, this trend continues for the balance of the year.”

Harry Kaplun, President, Specialty Finance, Frost Bank, said, “The MLFI-25 continues to support the strength in the equipment finance industry. Growing employment, minimal losses and high approval rates are all indicative of a favorable business climate.”

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
The 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.

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