All Indicators Up in Monthly Leasing and Finance Index

March 26, 2018 - 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 February was $7.7 billion, up 31% year-over-year from new business volume in February 2017.  

Volume was up 13% month-to-month from $6.9 billion in January. Cumulative new business volume year to date was up 20%, compared to 2017.

Receivables over 30 days were 1.60%, down from 1.90% the previous month and up from 1.50% the same period in 2017. Charge-offs were 0.28%, down from 0.34% the previous month, and down from 0.38% in the year-earlier period.

Credit approvals totaled 74.2% in February, down from 76.9% in January.

Total headcount for equipment finance companies was up 1.4%, year over year. During 2017, headcount was higher than normal due to acquisitions at an MLFI reporting company.

Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) in March is 72.2, easing from 73.2 in February.

ELFA President and CEO Ralph Petta said, “February originations offer further proof that 2018 is shaping up to be a very strong year for the equipment finance industry. Momentum spurred on by recently enacted tax changes together with an economy beginning to hit on most, if not all, cylinders, is creating a compelling demand cycle for capital equipment acquisition by American businesses, large and small. In addition, portfolios continue to perform at high levels, helping to contribute to the sense of optimism carried over from the second half of 2017.”

David Walton, President and CEO, Caterpillar Financial Services Corporation, said, “Business activity across many of the key industries we serve continues to be favorable. This can be attributed to the current positive overall industry fundamentals and economic conditions in the U.S. Although the outlook is for a continued increase in U.S. interest rates, our customers are still benefitting from historically low interest rates and evaluating the benefits of recent U.S. tax reform. As our customers continue to work towards successfully growing their businesses, we remain optimistic about the year ahead and focused on maintaining a healthy portfolio.”