EFLA Report: New Business Volume Down 10%

April 24, 2019 —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 that overall new business volume for March was $8.2 billion, down 10% year-over-year from new business volume in March 2018.

Volume was up 39% month-to-month from $5.9 billion in February. Year to date, cumulative new business volume was down 10% compared to 2018.

Receivables over 30 days were 1.90%, up from 1.80 the previous month and up from 1.70% the same period in 2018. Charge-offs were 0.37%, up from 0.35% the previous month, and down from 0.51% in the year-earlier period. Credit approvals totaled 75.3%, down from 76.0% from February. Total headcount for equipment finance companies was up 0.4% year-over-year.

Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) in April is 58.3, down from the March index of 60.4.

ELFA President and CEO Ralph Petta said, “First quarter new business volume got off to a slow start, relative to Q1 last year. This was not unexpected given analysts’ expectations that equipment and software capex in 2019 could not realistically expect to keep pace with last year’s strong showing.”

Alan Sikora, CEO of First American Equipment Finance and a member of the ELFA board of directors, said, “Following a year of growth in 2018, the equipment finance industry experienced two consecutive months of year-over-year declines. Time will tell whether this decrease is simply a hangover from December stock market volatility or an early sign of weakness in the U.S. economy.”

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 latest MLFI-25, including methodology and participants, is available at www.elfaonline.org/Data/MLFI/.