ELFA - Equipment Leasing and Finance Association - Equipping Business for Success

Monthly Leasing and Finance Index November 2007

Nov 1, 2007, 18:33 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 November increased 6.7 percent when compared to November 2006. According to year-to-date cumulative totals, new business volume for January to November 2007 was 7.1 percent higher when compared with the same period in 2006.

The MLFI-25 reported new business volume for November totaling $6.8 billion for new commercial equipment leases and loans, compared to $7.2 billion in October. New business volume for November 2006 totaled $6.3 billion.

Portfolio quality remained stable in November. Receivables in both the current (under 30 days) and over 90-day categories were virtually unchanged in each of the past three months. When compared to the prior year period, November receivables were much improved (1.1% versus .08%). Offsetting this is a slight (6 basis points) uptick in losses when compared to the prior month. However, they remain at historically low levels. Credit approval ratios declined when compared to both November 2006 data and the prior month (75.7%).

Total headcount decreased in November by 1.4 percent compared to the previous month, and, compared to the year over year data, showed a 10.7 percent drop.

"After slowing of growth in September and October, the November data shows corporate demand for investment in capital goods increased even in light of the continue decline in the housing sector and ensuing volatility in the capital markets," said Kenneth E. Bentsen, Jr., president of the ELFA. "In addition, portfolio credit quality remained strong although credit approvals declined slightly. The data would seem to indicate that the broad commercial sector of the economy continues to invest for the future even in light of the troubles in the mortgage market."

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 of receivables; charge-offs; credit approval ratios (approved vs. submitted); and headcount for the leasing and finance business.

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 a complete picture that describes the use of productive assets in the U.S. economy: 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 Johnson at djohnson@elfaonline.org

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)

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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 96.7% 0.9% 1.0% 1.4%
September 2006 97.6% 0.9% 0.5% 0.9%
  2007 97.8% 1.0% 0.4% 0.8%
November 2006 97.7% 0.9% 0.3% 1.1%
  2007 97.7% 1.1% 0.4% 0.8%
November 2006 97.6% 1.0% 0.3% 1.1%
  2007 97.6% 1.2% .4% .8%
December 2006 98.1% 0.8% 0.3% 0.7%

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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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