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Monthly Leasing and Finance Index July 2007

Jul 1, 2007, 18:42 PM

The Equipment Leasing and Finance Association's (ELFA) Monthly Leasing and Finance Index (MLFI-25), which reports equipment finance activity, showed that overall new business volume for July increased by 8.9 percent compared to the same month in 2006. According to year-to-date cumulative totals, new business volume for January to July 2007 was 9.9 percent higher when comparing the same period in 2006.

The MLFI-25 is a monthly index of the equipment finance volume of twenty-five financial services companies (listed below). Because the same companies participate in the survey each month, the MLFI-25 provides a consistent trend analysis of current activity.

The MLFI-25 reported new business volume for July totaled $6.7 billion for new commercial equipment leases and loans, compared to $9.1 billion in June. New business volume for July 2006 totaled $6.2 billion. This seems to trend with 2006 results when volume decreased to $6.2 billion in July from $8.1 billion in June.

Portfolio quality reported in July showed an up tick in delinquencies. Receivables under 30 days old declined one percent from the year-earlier period, 96.8 percent vs. 97.8 percent. Charge-offs remained flat compared to the prior month, but showed an increase when compared to the year-earlier period. Credit approval ratios declined when compared to both June of this year and June of last year.

Total headcount rose over the previous month. Headcount was 11,555 in July. In July 2006, headcount was higher at 12,893 or a 10.4 percent decrease year over year.

"The MLFI-25 data indicates that for the month of July, credit for capital investment was both readily available and utilized by the commercial sector," said Kenneth E. Bentsen, Jr., president of the ELFA.

MLFI-25 Methodology
ELFA produces the MLFI-25 report to help member organizations achieve competitive advantage by providing them with leading-edge research and benchmarking information which supports strategic business decision making. The report is also a barometer of the trends in U.S. capital equipment investment. Five components are included in the MLFI-25 survey: new business volume (originations); aging receivables (non-performing assets); charge-offs; credit approval (approved vs. booked); and headcount for leasing and finance business (indicator of stability).

The MLFI-25 provides metrics reflecting monthly commercial equipment lease and loan activity as reported by participating ELFA member equipment finance companies representing a cross section of the equipment finance sector including small ticket, middle market, large ticket, bank, captive and independent leasing and finance companies. Based on hard survey data, the responses mirror the economic activity of the broader equipment finance sector, which contributes to the representation of current business conditions nationally.

The MLFI-25 complements other relevant economic indices, including the monthly durable goods report produced by the U.S. Department of Commerce, which reflects new orders for manufactured durable goods and the Institute for Supply Management Index, which reports economic activity in the manufacturing sector. Along with the MLFI-25, which reflects levels of equipment financed, these reports provide the full economic picture for the equipment finance sector: equipment produced, acquired, and financed.

Results of each MLFI-25 are posted on the ELFA website and in ELT, the Magazine of Equipment Leasing and Finance. Charts and graphs are available for the media upon request; please contact Diane Zyats at ELFA.

Participants in the ELFA MLFI-25:

  • ADP Credit Corporation
  • Bank of America
  • Bank of the West
  • Canon Financial Services
  • Caterpillar Financial Services Corporation
  • CIT
  • Citicapital
  • De Lage Landen Financial Services
  • First American Equipment Finance
  • GreatAmerica
  • 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
  • Regions Equipment Finance
  • Siemens Financial Services
  • US Bancorp
  • US Express Leasing
  • Verizon Capital Corp
  • Volvo Financial Services
  • Wells Fargo Equipment Finance

MLFI-25 New Business Volume
(Year Over Year Comparison)
0707-NewBusVol

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Aging of Receivables:

Month Year Less than 30 days 31-60 days 61-90 days Over 90 days
January 2006 98.1% 0.9% 0.3% 0.7%
  2007 97.8% 1.0% 0.3% 0.8%
February 2006 97.8% 1.0% 0.4% 0.8%
  2007 97.5% 1.3% 0.3% 0.9%
March 2006 97.8% 1.0% 0.3% 0.7%
  2007 97.5% 1.0% 0.5% 1.0%
April 2006 98.0% 0.9% 0.3% 0.8%
  2007 97.4% 1.0% 0.4% 1.2%
May 2006 98.0% 1.0% 0.3% 0.7%
  2007 97.5% 1.1% 0.4% 1.0%
June 2006 98.0% 0.8% 0.4% 1.0%
  2007 97.6% 1.0% 0.4% 1.0%
July 2006 97.8% 0.9% 0.3% 0.9%
  2007 96.8% 1.8% 0.4% 1.0%
August 2006 97.8% 1.0% 0.4% 1.1%
  2007        
September 2006 97.6% 0.9% 0.5% 0.9%
  2007        
October 2006 97.7% 0.9% 0.3% 1.1%
  2007        
November 2006 97.6% 1.0% 0.3% 1.1%
  2007        
December 2006 98.1% 0.8% 0.3% 0.7%
  2007        

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Percentage of your net investment at risk
for receivables over 90 days
Net Investment at Risk

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

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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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