Overall July business volume for 25 companies representing a cross section of the $725 billion equipment finance sector was $7.2 billion, up 9 percent compared to volume in July 2012. This was a highlight of the Equipment Leasing and Finance Association’s (ELFA) Monthly Leasing and Finance Index (MLFI-25). It also reported, however, that month-over-month, new business volume was down 16 percent from June. Year to date, cumulative new business volume increased 10 percent compared to 2012.
Receivables over 30 days were at 1.5 percent in July, up slightly from the historic low of 1.4 percent in June. Delinquencies declined from 2.2 percent in the same period in 2012. Charge-offs were unchanged for the past five months at the all-time low of 0.3 percent.
Credit approvals totaled 78.6 percent in July, relatively unchanged from the previous two months. Fifty-eight percent of participating organizations reported submitting more transactions for approval during July, up from 54 percent the previous month.
Finally, total headcount for equipment finance companieswas up one percent year over year.
“The amount of new business financed during the spring and summer months continues to grow at a moderate pace, said ELFA President and CEO William G. Sutton, CAE. “While cooling off somewhat from a torrid June, this month’s increase in financing activity matches a strengthening economy evidenced by a rebounding housing market, GDP growth and declining unemployment picture. Credit markets also continue to perform well. These data points bode well for additional investment in capital equipment and an expanding U.S. economy. It will be interesting to see if this positive trend holds up as we move into late-summer and fall.”
William Houston, senior director, corporate administration, for Canon Financial Services, Inc.,said, “The MLFI-25 leasing volume is up 10 percent year to date, with minimal change in participants’ risk appetite. Aggregate delinquency and charge-off metrics are good indicators of a stable economic business environment. The data suggests the equipment leasing industry continues to enjoy strong new lease growth and healthy portfolios.”