April Equipment Financing Up 23% Over Year Ago

Month-over-month, new business volume was up 10 percent from March.

Overall new business volume in April for 25 companies representing a cross section of the $725 billion equipment finance sector was $7.5 billion, up 23 percent compared to volume in April 2012. Month-over-month, new business volume was up 10 percent from March. Year to date, cumulative new business volume was up eight percent compared to 2012. These numbers were reported in the Equipment Leasing and Finance Association’s (ELFA) Monthly Leasing and Finance Index (MLFI-25).

Overall new business volume for April Receivables over 30 days were unchanged in April from the previous two months at 2.0 percent.  They were down from 2.7 percent in the same period in 2012. Charge-offs were unchanged from March at the all-time low of 0.3 percent.

Credit approvals totaled 77.2 percent in April, down from 78.4 percent in March.  Seventy-two percent of participating organizations reported submitting more transactions for approval during April, up 50 percent from the previous month.

Finally, total headcount for equipment finance companieswas up three percent from the previous month, and was unchanged year over year.

ELFA President and CEO William G. Sutton, CAE, said: “Both performance indices—the MCI as an indicator of future optimism about the direction of the U.S. economy, and the MLFI-25’s growth trend in new business activity—provide solid evidence that the demand side of the capital investment equation continues to pick up as the broader economy strengthens. It is our hope that this trend pushes into the second half of the year.”

Paul J. Menzel, President and CEO, Financial Pacific Leasing, LLC, said: “Over the last four years businesses of all sizes have pursued a defensive strategy of austerity by right sizing their balance sheets, maximizing operating efficiencies, and optimizing cash flow, all while top line revenue growth has remained weak.  This has kept many borrowers and lessees on the sidelines despite historically low rates. The anemic revenue story may be coming to an end as businesses seem to be going on the offensive and investing for growth, as this month’s MLFI data reflects.

 

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