January New Business Volume Up 28 Percent Year-over-year
WASHINGTON–(BUSINESS WIRE)–#capex–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 $900 billion equipment finance sector, showed their overall new business volume for January was $9.2 billion, up 28 percent year-over-year from new business volume in January 2019. Volume was down 29 percent month-to-month from $12.9 billion in December following the typical end-of-quarter, end-of-year spike in new business activity.
Receivables over 30 days were 2.00 percent, down from 2.20 percent the previous month and unchanged from the same period in 2019. Charge-offs were 0.47 percent, down from 0.51 percent the previous month, and up from 0.35 percent in the year-earlier period.
Credit approvals totaled 76.3 percent, down from 77.1 percent in December. Total headcount for equipment finance companies was down 3.0 percent year-over-year.
Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) in February is 58.7, easing from the January index of 59.9.
ELFA President and CEO Ralph Petta said, “The year starts off with a bang as January new business volume increases dramatically on a year-over-year basis. Underlying fundamentals in the U.S. economy—strong job growth, low inflation, low interest rates, continuation of a bull equities market and solid business confidence—all add up to a growing demand for productive equipment necessary to keep businesses expanding and profitable.”
Stephen Hamilton, Chairman and CEO, CSI Leasing, Inc., said, “2019 was another record year for CSI, with lease originations up 15 percent worldwide to over $1.4 billion, led by a strong increase of 23 percent in our U.S. business. Back office efficiencies and use of technology have allowed this to occur with no increase in our U.S. leasing headcount. Our traditional focus on successful middle-market to large corporate customers has resulted in continued strong credit performance with minimal write-offs. Optimism is high for 2020, with a solid start in January and a record pipeline of first quarter business on tap, although we expect uncertainty regarding the impacts of the coronavirus and the November elections could slow customer decision-making in coming months.”
About the ELFA’s MLFI-25
The MLFI-25 is the only index that reflects capex—the volume of commercial equipment financed in the U.S.—and is released as a complementary economic indicator the day before the U.S. Department of Commerce releases the durable goods report.
To read a detailed description and methodology of the MLFI-25, visit http://www.elfaonline.org/Data/MLFI/
About ELFA
The Equipment Leasing and Finance Association (ELFA) is the trade association that represents companies in the nearly $1 trillion equipment finance sector, which includes financial services companies and manufacturers engaged in financing capital goods. ELFA members are the driving force behind the growth in the commercial equipment finance market and contribute to capital formation in the U.S. and abroad. Its 575 members include independent and captive leasing and finance companies, banks, financial services corporations, broker/packagers and investment banks, as well as manufacturers and service providers. For more information, please visit www.elfaonline.org.
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Contacts
Amy Vogt, Vice President, Communications and Marketing, ELFA, 202-238-3438 or avogt@elfaonline.org
