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Equipment Leasing and Finance Association’s Survey of Economic Activity: September 2017 Leasing and Finance Index

Monday, October 30, 2017

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 September was $8.7 billion, down 7 percent year-over-year from new business volume in September 2016. Volume was up 12 percent month-to-month from $7.8 billion in August. Year to date, cumulative new business volume was up 4 percent compared to 2016.

Receivables over 30 days were 1.40 percent, down from 1.50 percent the previous month and down from 1.50 percent in the same period in 2016. Charge-offs were 0.40 percent, down from 0.44 percent the previous month, and down from 0.46 percent in the year-earlier period.

Credit approvals totaled 74.0 percent in September, down from 75.3 percent in August. Total headcount for equipment finance companies was up 16.5 percent year over year, largely attributable to continued acquisition activity at an MLFI reporting company.

Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) for October is 63.7, unchanged from September.

ELFA President and CEO Ralph Petta said, “Third quarter new business volume was steady, if not exceptional, despite the string of devastating weather events that plagued parts of the U.S. during the month of September. Positive cumulative year-to-date volume is indicative of healthy capex, which shows that business owners continue to choose financing as a means to acquire the equipment they need to run their operations. In addition, credit quality remains at historic lows. These metrics bode well for a solid end-of-year performance.”

William J. Clark, Executive Vice President, Univest Capital, Inc., said, “Overall, September 2017 was a satisfactory month for commercial originations. Our municipal originations were above average for the month. We continue to see aggressive pricing in the market and loosening of credit standards especially as it relates to ‘corp only’ approvals. It is becoming increasingly challenging, however, we are maintaining a superior net interest margin compared to our select peer group. It is part of a strategic plan to increase our average ticket and we are experiencing some success with that, especially in the municipal and golf/turf vertical markets. Additionally, we are seeing larger financing opportunities referred by our parent bank and affiliates.”

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