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Monthly Leasing and Finance Index December 2006

Dec 1, 2006, 18:57 PM

The Equipment Leasing and Finance Association (ELFA) Monthly Leasing and Finance Index (MLFI-25) of equipment leasing and finance activity for December releases today, showing overall volume for the period nearly doubling when compared to November originations. The MLFI-25 provides metrics reflecting monthly commercial equipment lease and loan activity as reported by the 25 participating ELFA member equipment finance companies.

December originations reported by the MLFI-25 increased significantly, totaling $10.4 billion for new commercial equipment leases and loans, compared to $5.6 billion in the prior month. This growth in new leasing and finance volume supports the trend reflected in the 3.1 percent increase in durable goods orders for the month and the Institute of Supply Chain Management index, in which economic activity in the manufacturing sector also showed growth for December.

Portfolio quality showed mixed results: Receivables over 90 days matched its low for the year, at 0.7 percent, while average losses increased slightly over the prior month. The trend toward enhanced credit scrutiny continues, with credit approval ratios close to their lowest for the year: 78 percent of all submitted deals. Total headcount increased ever so slightly, continuing a growth trend indicated in 11 of the last 12 months.

"December has traditionally proven to be the strongest month of the year for the industry from a new origination standpoint and this year was no exception," said Rick Wolfert, Vice Chairman, Commercial Finance, CIT Group, Inc. "Of note, portfolio quality remained stable as we continue to benefit from a benign credit environment."

The participant companies in the MLFI-25 represent a broad cross section of the equipment finance sector including small ticket, middle market, large ticket, bank, captive and independent leasing and finance companies. Because the same companies participate in the survey each month, the MLFI-25 provides a consistent trend analysis of current industry activity. Results of each MLFI-25 are posted on the ELFA website and Equipment Leasing Today magazine. Charts and graphs are available for reprint to the media.

The ELFA provides a variety of studies, reports, and market analyses covering the $234 billion equipment finance sector. To access this and other industry information, visit the ELFA website at http://www.elfaonline.org/Ind/Research/ or contact Bill Choi, bchoi@elfaonline.org.

Participants in the ELA MLFI-25:

  • ADP Credit Corporation
  • Amsouth Leasing Corporation
  • Bank of America Leasing
  • Bank of the West
  • Canon Financial Services
  • Caterpillar Financial Services Corporation
  • CIT
  • De Lage Landen Financial Services
  • First American Equipment Finance
  • GreatAmerica Leasing Corporation
  • Hitachi Credit America
  • HP Financial Services
  • Irwin Financial
  • John Deere Credit Corporation
  • Key Equipment Finance
  • LaSalle National Leasing Corporation
  • Marlin Leasing Corporation
  • National City Commercial Corp.
  • RBS Asset Finance
  • Siemens Financial Services
  • US Bancorp Leasing & Financial
  • US Express Leasing
  • Verizon Capital Corp/Verizon Credit
  • Volvo Financial Services
  • Wells Fargo Equipment Finance

Total New Business Volume (Leases and Loans)

1206-NewBusVol

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Aging of Receivables:

  2006
  Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec.
Less than 30 days 98.1% 97.8% 98.0% 98.0% 98.0% 98.0% 97.8% 97.6% 97.7% 97.7% 97.6% 98.1%
31-60 days 0.9% 1.0% 1.0% 0.9% 1.0% 0.8% 0.9% 1.0% 0.9% 0.9% 1.0% 0.8%
61-90 days 0.3% 0.4% 0.3% 0.3% 0.3% 0.4% 0.3% 0.4% 0.5% 0.3% 0.3% 0.3%
Over 90 days 0.7% 0.8% 0.7% 0.8% 0.7% 1.0% 0.9% 1.1% 0.9% 1.1% 1.1% 0.7%

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Annualized Average Loss (Charge-Offs as a % of Net Receivables)

Annualized Average Loss

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Credit Approval Ratios (As % of All Decisions Submitted)

Credit Approval Ratios

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Total Number of Employees

Total Number of Employees

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