Overall new business volume for the equipment finance sector in September was $7.1 billion, up 25 percent from volume of $5.7 billion in the same period in 2010, according to the Equipment Leasing and Finance Association’s (ELFA) Monthly Leasing and Finance Index. Volume was also up 25 percent from the previous month for this $628 billion business sector. Year-to-date cumulative new business volume is up 25 percent as well.
Credit quality metrics were mixed. Receivables over 30 days decreased to 2.3 percent in September from 2.5 percent in August, and declined by 32.4 percent compared to the same period in 2010. However, charge-offs increased 50 percent from August, and decreased by 43.8 percent from the same period in 2010.
Credit standards tightened in September as the number of lease applications approved decreased nominally to 76.5 percent from 77.6 percent the previous month. Sixty percent of participating organizations reported submitting more transactions for approval during the month.
Finally, total headcount for equipment finance companies in September showed no significant change month to month and was down 1.4 percent year over year. Supplemental data show that the construction and trucking industries and small- and medium-sized enterprises led the underperforming sectors.
Separately, the Equipment Leasing & Finance Foundation's Monthly Confidence Index (MCI-EFI) for October is 50.7, up from the September index of 47.6.
“Our industry continues to show signs of strengthening despite a stubbornly stagnant U.S. and global economy,” said ELFA President and CEO William G. Sutton. “The spike in write-offs during the period shows that some lease and loan portfolios are under pressure. However, our trends in new business volume growth and delinquency experience both appear to continue to trend in the right direction.”
Anthony R. Sasso, president of TD Equipment Finance, a subsidiary of TD Bank, N.A., located in Cherry Hill, NJ, said, “Our results at TD Equipment Finance are consistent with the data in the September MLFI, particularly in the area of New Business Volume. Our 2011 volumes have outpaced 2010 largely driven by growth in the Public Finance, Healthcare, Trucking and Renewable Energy sectors. Our credit quality metrics, aging of receivables and charge offs, also continue to improve from last year. Notwithstanding events in the global economy, we’re seeing slow but steady growth in our pipelines of opportunities.”