Monthly Leasing and Finance Index

June New Business Volume Up 9 Percent Year-over-year, 9 Percent Month-over-month and 1 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 $9.9 billion, up 9 percent year-over-year from new business volume in June 2018. Volume was up 9 percent month-to-month from $9.1 billion in May. Year to date, cumulative new business volume was up 1 percent compared to 2018.

Receivables over 30 days were 1.70 percent, unchanged from the previous month and up from 1.40 percent the same period in 2018. Charge-offs were 0.33 percent, down from 0.46 percent the previous month, and unchanged from the year-earlier period.

Credit approvals totaled 77.0 percent, up from 75.9 percent in May. Total headcount for equipment finance companies was down 2.2 percent year-over-year.

Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) in July is 57.9, up from the June index of 52.8.

ELFA President and CEO Ralph Petta said, “After a sluggish beginning to the year, Q2 new business volume in the equipment finance sector, as measured by responding organizations to the MLFI-25, shows a healthy gain. As we head into the summer months, the economy and credit markets continue to perform well. Demand for financed equipment is strong.”

Deborah Baker, Head of Worldwide Leasing & Financing, HP, Inc., said, “The MLFI-25 positive year-over-year growth is a key market indicator. The Equipment Leasing & Finance Foundation Q3 2019 Industry Snapshot data show similar optimism. Despite the headwinds associated with continued trade tensions, the U.S. economy realized an improved annualized growth rate of 3.1 percent in Q1 aided by tailwinds associated with strength in the oil sector and more temperate Federal Reserve actions on interest rates. Such results increase confidence in potential full year results.”

 

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.

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