The Equipment Leasing and Finance Association’s (ELFA) said overall business volume increased 23 percent in April compared to volume during the same period in 2012. Month-over-month, new business volume was up 10 percent from March. Year-to-date, cumulative new business volume increased eight percent compared to 2012.
ELFA said receivables over 30 days were unchanged in April from the previous two months at 2.0 percent and that they were down from 2.7 percent in the same period in 2012. Charge-offs were unchanged from March at the all-time low of 0.3 percent, according to the organization.
The organization stated that credit approvals totaled 77.2 percent in April, down from 78.4 percent in March. Seventy-two percent of participating organizations reported submitting more transactions for approval during April, up 50 percent from the previous month. Total headcount for equipment finance companies was up three percent from the previous month, and was unchanged year over year.
Separately, the ELFA’s Monthly Confidence Index (MCI-EFI) for May is 56.7, which an increase from the April index of 54.0, reflecting industry participants’ increasing optimism despite continuing concerns over the economy and the impact of federal policies on capital expenditures.
“Both performance indices—the MCI as an indicator of future optimism about the direction of the U.S. economy, and the MLFI-25’s growth trend in new business activity—provide solid evidence that the demand side of the capital investment equation continues to pick up as the broader economy strengthens,” said ELFA President and CEO William G. Sutton, CAE. “It is our hope that this trend pushes into the second half of the year.”
“Over the last four years businesses of all sizes have pursued a defensive strategy of austerity by right sizing their balance sheets, maximizing operating efficiencies, and optimizing cash flow, all while top line revenue growth has remained weak,” said Paul J. Menzel, president and CEO, Financial Pacific Leasing, LLC. “This has kept many borrowers and lessees on the sidelines despite historically low rates. The anemic revenue story may be coming to an end as businesses seem to be going on the offensive and investing for growth, as this month’s MLFI data reflects.”