The Equipment Leasing and Finance Association’s Monthly Leasing and Finance Index

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 $827 billion equipment finance sector, showed their overall new business volume for March was $7 billion, up 3 percent from new business volume in March 2013.  Month-over-month, new business volume was up 30 percent from February. Year to date, cumulative new business volume increased 6 percent compared to 2013. 

Receivables over 30 days increased to 2.1 percent from 1.8 percent the previous month, and were up slightly from 2.0 percent during the same period in 2013. Charge-offs were down at a new all-time low of 0.2 percent from 0.4 percent the previous month.

Credit approvals totaled 77.8 percent in March, an increase from 75.3 percent the previous month. Sixty-five percent of participating organizations reported submitting more transactions for approval during March, an increase from 53 percent during February.

Finally, total headcount for equipment finance companies was up 4.4 percent year over year.

Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) for April is 65.1, remaining at the highest index level in two years for the second consecutive month. 

ELFA President and CEO William G. Sutton, CAE, said: “Equipment finance companies in almost all industry sectors are reporting a strong first quarter of the year. The March data showing new business volume clearly provides evidence of a strong first quarter looking back and a positive forecast for future activity. The Federal Reserve recently hinted at continuing a monetary policy that will promote a sustained low interest rate environment at least for the foreseeable future, which is giving the business community a reason to feel confident about the overall trajectory of the U.S. economy and make capital investments in their businesses. Credit quality metrics are mixed, with delinquencies edging upward counterbalanced by monthly losses reaching historic lows. Another positive sign for the industry is the trend toward increased hiring during the past 10 months.”

Brian J. Griffin, Senior Vice President, Leasing, MB Financial Bank, N.A., said, “The continued strong metrics measured by the MLFI-25 reflect the ongoing strength of the economy and, more specifically, the leasing industry. Of particular significance is the dramatic increase in new business volume from February, the record low charge-off percentage and the continued increase in headcount in the industry. If medium- and long-term rates can remain relatively stable, these results bode well for continued growth for the balance of the year.”

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 below and also at http://www.elfaonline.org/Research/MLFI/

For a video of the MLFI for Q1 2014, please visit http://youtu.be/UuyYiQMqBf4

MLFI-25 Methodology

The 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.

ELFA MLFI-25 Participants

ADP Credit

BancorpSouth Equipment Finance

Bank of America

Bank of the West

BB&T Bank

BMO Harris Equipment Finance

Canon Financial Services

Caterpillar Financial Services

CIT

De Lage Landen Financial Services

Dell Financial Services

Direct Capital Corporation

EverBank Commercial Finance

Fifth Third Equipment Finance

First American Equipment Finance, a City National Bank Company

GreatAmerica Financial Services

Hitachi Credit America

HP Financial Services

Huntington Equipment Finance

John Deere Financial

Key Equipment Finance

LEAF Commercial Capital

M&T Bank

Marlin Leasing

Merchants Capital

PNC Equipment Finance

RBS Asset Finance

SG Equipment Finance

Siemens Financial Services

Stearns Bank

Suntrust

Susquehanna Commercial Finance

TCF Equipment Finance

US Bancorp Equipment Finance

Verizon Capital

Volvo Financial Services

Wells Fargo Equipment Finance

About the ELFA 

The Equipment Leasing and Finance Association (ELFA) is the trade association that represents companies in the $827 billion equipment finance sector, which includes financial services companies and manufacturers engaged in financing capital goods. ELFA members are the driving force behind the growth in the commercial equipment finance market and contribute to capital formation in the U.S. and abroad. Its 580 members include independent and captive leasing and finance companies, banks, financial services corporations, broker/packagers and investment banks, as well as manufacturers and service providers. For more information, please visit www.elfaonline.org.