Equipment Leasing and Finance Association - Equiping Business for Success

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Monthly Leasing and Finance Index December 2013

Dec 1, 2013, 14:36 PM

Participants in the ELFA MLFI-25:

  • ADP Credit
  • BancorpSouth Equipment Finance
  • Bank of America
  • Bank of the West
  • BB&T Bank
  • BMO Harris Equipment Finance
  • Canon Financial Services
  • Caterpillar Financial Services
  • CIT
  • De Lage Landen Financial Services
  • Dell Financial Services
  • Direct Capital Corporation
  • EverBank Commercial Finance
  • Fifth Third Equipment Finance
  • First American Equipment Finance, a City National Bank Company
  • GreatAmerica Financial Services
  • Hitachi Credit America
  • HP Financial Services
  • Huntington Equipment Finance
  • John Deere Financial
  • Key Equipment Finance
  • LEAF Commercial Capital Inc.
  • M&T Bank
  • Marlin Leasing
  • Merchants Capital
  • PNC Equipment Finance
  • RBS Asset Finance
  • SG Equipment Finance
  • Siemens Financial Services
  • Stearns Bank
  • Suntrust
  • Susquehanna Commercial Finance
  • TCF Equipment Finance
  • US Bancorp Equipment Finance
  • Verizon Capital
  • 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 from 25 companies representing a cross section of the $827 billion equipment finance sector, showed their overall new business volume for December was $10.7 billion, down 7 percent from new business volume in December 2012. In a typical end-of-year spike, their new business volume was up 62 percent from the previous month's volume of $6.6 billion. Cumulative new business volume for 2013 rose 3 percent over 2012.

Receivables over 30 days were at 1.9 percent in December, up slightly from 1.8 percent in November. Delinquencies increased from 1.6 percent in the same period in 2012. Charge-offs were unchanged from the previous month at the all-time low of 0.3 percent.

Credit approvals totaled 78.3 percent in December, an increase from 76.5 percent the previous month. Fifty-seven percent of participating organizations reported submitting more transactions for approval during December, an increase from 47 percent November.

Finally, total headcount for equipment finance companies was up 2 percent year over year.

Separately, the Equipment Leasing & Finance Foundation's Monthly Confidence Index (MCI-EFI) for January is 64.9, the highest confidence level in two years, and an increase from the December index of 55.8. An improved general outlook for economic activity among industry leadership contributed to the increase.

ELFA President and CEO William G. Sutton, CAE, said: "December's strong volume number is consistent with the typical growth pattern of a very busy end of year for many equipment finance organizations. Overall, 2013 was a very good year for many ELFA members: the cumulative growth data for the year bear this out. Offsetting this strong performance in new business activity, however, were reports of margin compression in virtually all sectors. Aggressive competition, low interest rates, and declining yields put pressure on overall profitability. Credit quality continues to be very manageable, despite the slight uptick in delinquencies."

Miles Herman, President and COO, LEAF Commercial Capital, Inc., said, "I remain relatively optimistic about 2014, and believe that we are heading in the right direction. My optimism is tempered by the nominal shortfall indicated by the MLFI-25 between December of 2012 and December of 2013. Nevertheless, the report also shows that business volume is up overall, and that December was in fact 62 percent above November. Based on the most recent Monthly Confidence Index, it appears that my colleagues concur, at least to varying degrees. It is of course worth noting that this MCI is the strongest it has been for the prior 24 months. That kind of consistent optimism is, in and of itself, a good sign.

 

MLFI-25 New Business Volume
(Year Over Year Comparison)
1213-NewBusVol

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Aging of Receivables Over 30 Days:

AgingofRcv.png

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Average Losses (Charge-offs) as a % of net receivables
(Year Over Year Comparison)
Average Losses

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Credit Approval Ratios As % of all Decisions Submitted
(Year Over Year Comparison)
Credit Approval Ratios

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Total Number of Employees
(Year Over Year Comparison)
Total Number of Employees 

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