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ELFA’s survey of economic activity: April 2017 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 $1 trillion equipment finance sector, showed their overall new business volume for April was $7.9 billion, up 8 percent year-over-year from new business volume in April 2016. Volume was down 11 percent month-to-month from $8.9 billion in March. Year to date, cumulative new business volume was up 5 percent compared to 2016.

Receivables over 30 days were 1.30 percent, down from 1.40 percent the previous month and up from 1.20 percent in the same period in 2016. Charge-offs were 0.38 percent, down from 0.68 percent the previous month, and up from 0.31 percent in the year-earlier period.

Credit approvals totaled 75.9 percent in April, up from 74.5 percent in March. Total headcount for equipment finance companies was up 19.9 percent year over year, largely attributable to continued acquisition activity at an MLFI reporting company.

Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) for May is 63.2, easing from the April index of 65.8.

ELFA President and CEO Ralph Petta said, “The start of the second quarter as reported by a representative sample of ELFA member companies was a relatively strong one, with new business volume increasing eight percent on a year-over-year basis. Whether this robust activity was the result of slightly rising interest rates or reflective of sound fundamentals in the U.S. economy is yet to be determined. What is known, however, is that the equipment finance business is off to a good start this year. Credit markets also appear to be performing well, as evidenced by lower delinquencies and charge offs.”

Siemens Financial Services Commercial Finance North America CEO Gary Amos said, “A new generation of technological innovation and increased connectivity has many industries retaining positive optimism for new equipment leasing growth prospects. Credit approval ratings are still lagging behind last year’s numbers, which could signal a rise in new customer applications and orders for 2017. Currently, volume for 2017 is up, and credit quality is becoming increasingly paramount. Economic trepidation overshadows the economy as the new presidential administration establishes its identity.”
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