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 $900 billion equipment finance sector, showed their overall new business volume for December was $12.9 billion, up 2 percent year-over-year from new business volume in December 2018. Volume was up 65 percent month-to-month from $7.8 billion in November in a typical end-of-year spike. Cumulative new business volume for 2019 was up 5 percent from 2018.
Receivables over 30 days were 2.20 percent, up from 1.80 percent the previous month and up from 1.70 percent the same period in 2018. Charge-offs were 0.51 percent, up from 0.43 percent the previous month, and down from 0.55 percent in the year-earlier period.
Credit approvals totaled 77.1 percent, up from 75.7 percent in November. Total headcount for equipment finance companies was down 3.3 percent year-over-year.
Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) in January is 59.9, an increase from the December index of 56.2.
ELFA President and CEO Ralph Petta said, “Equipment finance companies ended the year with steady 5 percent cumulative new business growth. However, some ELFA member organizations are seeing slightly elevated levels of stress in their portfolios, corroborating evidence that soft patches can be found in some sectors of the U.S. economy. Whether recent relaxation of nagging trade tensions between the U.S. and several of its trading partners improves conditions in the industrial and ag sectors of the U.S. economy remains to be seen as we move deeper into the new year.”
Tony Golobic, Chairman and Chief Executive Officer, GreatAmerica Financial Services, said, “We have done well for the past 12 months. While our new business volume has increased a modest 6 percent, our spreads have shown a nice improvement and the quality of our business is quite satisfactory. There has been a slight uptick in our credit losses, yet they continue to be substantially below ‘normal’ levels. We are optimistic about calendar year 2020, foreseeing modest growth of quality and profitable volume as we work hard to help our customers be even more successful.”
About the ELFA’s MLFI-25
The MLFI-25 is the only index that reflects capex—the volume of commercial equipment financed in the U.S.—and is released as a complementary economic indicator the day before the U.S. Department of Commerce releases the durable goods report.
To read a detailed description and methodology of the MLFI-25, visit http://www.elfaonline.org/Data/MLFI/
About ELFA
The Equipment Leasing and Finance Association (ELFA) is the trade association that represents companies in the nearly $1 trillion 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 575 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.
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