Equipment-Finance Activity Up Year over Year and Year to Date

The financial indicator that tracks the volume of commercial equipment financed in the U.S. is showing that equipment financers’ overall new business volume for August was $9.2 billion, up 3% from a year ago. The Equipment Leasing and Finance Association’s latest Monthly Leasing and Finance Index also finds that volume was down 2% month to month from $9.4 billion in July but, year to date, cumulative new business volume was up 3%  

Overall, that performance translates into a view of the U.S. economy as continuing to see sustained moderate growth in many business sectors.

The index reports economic activity from 25 companies that represent a cross section of the $1 trillion equipment finance sector, according to ELFA.

The index also shows that receivables over 30 days were 2%, unchanged from the previous month and up from 1.9% vs. the same period in 2018. Charge-offs were 0.42%, up from 0.37% the previous month, and up from 0.29% in the year-earlier period.

Meantime, credit approvals totaled 76.6%, up from 75.7% in July, and total headcount for equipment finance companies was down 2.1% year over year.

Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index came in at 54.7 for September, down from the August index of 58.9.

“New business volume reported by member-respondents grew modestly in August, as the U.S. economy continues to perform well,” remarked ELFA President and CEO Ralph Petta in a release. “ A variety of economic indicators all point to a continued pattern of sustained, moderate growth in many sectors within the equipment finance industry.”

Richard E. Barry, president of Merchants Bank Equipment Finance, commented that the index’s August monthly and year-to-date new origination volume activity “demonstrates a consistent increase” over last year's monthly and year-to-date results. Credit quality continues to be actively monitored as month-over-month charge-offs rose slightly. The [August Monthly Leasing and Finance Index] points to the continued desire of business owners to invest in efficient and productive capital equipment solutions for their enterprises.”