January Equipment Financing up 4% from January of '18

February 26, 2019 - The Equipment Leasing and Finance Association’s (ELFA) Monthly Leasing and Finance Index (MLFI-25) reports economic activity from a 25-company cross section of the $1 trillion equipment finance sector.

The newly released index for January 2019 shows that overall new business volume reached $7.2 billion, up 4% year-over-year from January 2018.

Volume was down 43% month-to-month from $12.7 billion in December 2018, following the typical end-of-quarter, end-of-year, spike in new business.

Receivables over 30 days were 1.70%, unchanged from the previous month and down from 1.90% during the same period in 2018. Charge-offs were 0.35%, down from 0.55% the previous month, and virtually unchanged from the year-earlier period.

Credit approvals totaled 76.1% in January, down from 77.9% in December. Total headcount for equipment finance companies was flat year over year.

Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) in February is 56.7, up from the January index of 53.4.

ELFA President and CEO Ralph Petta said, “2019 gets off to a strong start in the equipment finance industry, with new business volume increasing 4% over the same period last year. Credit quality is stable. Business owners continue to expand their operations and acquire productive assets, even as interest rates edge up ever so slightly, with the Fed signaling a cautious wait-and-see posture for additional interest rate hikes this year.”

Dave B. Fate, president and CEO, Stonebriar Commercial Finance, said, “The equipment finance industry remains robust with steady to improving metrics as we start the new year. Multiple factors contributed to an overall positive impact in the markets, including continued strong reported corporate earnings, record low unemployment, strong retail sales, trade talks moving forward in a positive fashion and the Federal Reserve’s significant change in tone. Stonebriar Commercial Finance had its fourth consecutive year since inception of record earnings, originations and no delinquency or credit losses. We enter 2019 with over $1 billion of new business volume in various stages in our pipeline. We remain bullish about the prospects in our industry for 2019.”

 

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.