Washington, DC (Dec. 20, 2019) — 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 November was $7.8 billion, down 3 percent year-over-year from new business volume in November 2018. Volume was down 23 percent month-to-month from $10.1 billion in October. Year to date, cumulative new business volume was up 5 percent compared to 2018.
Receivables over 30 days were 1.80 percent, down from 2.00 percent the previous month and up from 1.60 percent the same period in 2018. Charge-offs were 0.43 percent, down from 0.46 percent the previous month, and up from 0.37 percent in the year-earlier period.
Credit approvals totaled 75.7 percent, down from 76.3 percent in October. Total headcount for equipment finance companies was down 2.9 percent year-over-year.
Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) in December is 56.2, an increase from the November index of 54.9.
ELFA President and CEO Ralph Petta said, “Reflecting an overall softening in equipment and software investment during much of the year—and particularly in Q3—November’s decline in new business volume reported by MLFI respondents was not terribly surprising. Uncertainty brought on by the prolonged trade frictions with China, which at the time of this writing appear to be significantly mitigated as a result of a recently announced Phase 1 trade deal between the two countries, was also partly responsible for this slowdown. Credit markets continue to perform well, with losses and delinquencies still in very acceptable ranges.”
About ELFA’s MLFI-25
The MLFI-25 is the only index that reflects capex, or the volume of commercial equipment financed in the U.S. The MLFI-25 is released globally at 8 a.m. Eastern time from Washington, D.C., each month on the day before the U.S. Department of Commerce releases the durable goods report. The MLFI-25 is a financial indicator that complements the durable goods report and other economic indexes, including the Institute for Supply Management Index, which reports economic activity in the manufacturing sector. Together with the MLFI-25 these reports provide a complete view of the status of productive assets in the U.S. economy: equipment produced, acquired and financed.
The MLFI-25 is a time series that reflects two years of business activity for the 25 companies currently participating in the survey. The latest MLFI-25, including methodology and participants, is available here.
MLFI-25 Methodology
ELFA produces the MLFI-25 survey to help member organizations achieve competitive advantage by providing them with leading-edge research and benchmarking information to support strategic business decision making.
The MLFI-25 is a barometer of the trends in U.S. capital equipment investment. Five components are included in the survey: new business volume (originations), aging of receivables, charge-offs, credit approval ratios, (approved vs. submitted) and headcount for the equipment finance business.
The MLFI-25 measures 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 and current business conditions nationally.
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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.
ELFA is the premier source for statistics and analyses concerning the equipment finance sector. Please visit here for additional information.
About the Foundation
The Equipment Leasing & Finance Foundation is a 501c3 non-profit organization that propels the equipment finance sector—and its people—forward through industry-specific knowledge, intelligence, and programs that contribute to industry innovation, individual careers, and the overall betterment of the equipment leasing and finance industry. The Foundation is funded through individual and corporate donations.
