Monthly Leasing and Finance Index February 2011
- :: New Business Volume
- :: Aging of Receivables
- :: Average Losses
- :: Credit Approval Ratios
- :: Total Number of Employees
- :: About the MLFI-25
Participants in the ELFA MLFI-25:
- ADP Credit Corporation
- Bancorp South Equipment Finance
- Bank of America
- Bank of the West
- Canon Financial Services
- Caterpillar Financial Services Corporation
- De Lage Landen Financial Services
- Dell Financial Services
- EverBank Commercial Finance
- Fifth Third Bank
- First American Equipment Finance
- Hitachi Credit America
- HP Financial Services
- John Deere Financial
- Key Equipment Finance
- M&I Equipment Finance
- Marlin Leasing Corporation
- Merchants Capital
- National City Commercial Corp.
- RBS Asset Finance
- Siemens Financial Services
- Stearns Bank
- Susquehanna Commercial Finance, Inc.
- US Bancorp
- Verizon Capital Corp
- Volvo Financial Services
- Wells Fargo Equipment Finance
The Equipment Leasing and Finance Association's (ELFA) Monthly Leasing and Finance Index (MLFI-25), which reports economic activity for the $521 billion equipment finance sector, showed overall new business volume for February was $4.1 billion, up 28 percent compared to the same period in 2010. Measured against the prior month, February volume was down a tick. And, it is worth noting that only 10 percent of responding organizations reported declining volume activity when compared to the year-earlier period.
Credit quality continues to be mixed. Receivables over 30 days increased to 3.1 percent in February from 2.8 percent in January, but declined by 47 percent compared to the same period in 2010. Charge-offs increased slightly, from 0.9 percent in January to 1.0 percent in February, but showed dramatic improvement over the same period in 2010.
Compared to the year-earlier period, credit standards eased as new application approvals increased to 76 percent in February. And, 61 percent of participating organizations reported submitting more transactions for approval during the month, up from 56 percent of responding organizations in January.
Finally, total headcount for equipment finance companies remained flat for the last four months, but was down four percent year-over-year. Supplemental data shows that the construction and trucking sectors once again led the underperforming sectors in February.
Separately, the Equipment Leasing & Finance Foundation's Monthly Confidence Index (MCI-EFI) for March is 72.4, a new high since the MCI was launched in May 2009, and an increase from the previous high of 71.6 in February. For more detailed information on the MCI-EFI visit www.LeaseFoundation.org
ELFA President and CEO William G. Sutton, CAE, said, "Both performance indicesÑthe MLFI and MCIÑshow reasons to be optimistic about the equipment finance sector as the economy slowly recovers and the demand side of the capital investment equation picks up steam."
Speaking from the healthcare equipment finance perspective, ELFA member James Cress, Director of Operations, Stryker Finance, located in Kalamazoo, MI, said, "Demand for healthcare equipment financing in the beginning of the year has been softer than anticipated, but we believe that growing pipelines, combined with an increase in new construction and renovation, indicate that demand is picking up."
Cress added, "The abundance of cash in the marketplace, along with continued uncertainty tied to regulation, healthcare reform and the global economy, is creating increasing pressures on finance companies.Ê However, these challenges are driving more innovation of financial products by the industry to meet the needs of our customers in more creative ways."