ELFA economic activity survey: April new business up 23% year-over-year

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 $725 billion equipment finance sector, showed their overall new business volume for April was $7.5 billion, up 23% compared to volume in April 2012. Month-over-month, new business volume was up 10% from March. Year to date, cumulative new business volume was up 8% compared to 2012.

Receivables over 30 days were unchanged in April from the previous two months at 2%. They were down from 2.7% in the same period in 2012. Charge-offs were unchanged from March at the all-time low of 0.3%.

Credit approvals totaled 77.2% in April, down from 78.4% in March. Seventy-two percent of participating organizations reported submitting more transactions for approval during April, up 50% from the previous month.

Finally, total headcount for equipment finance companies was up 3% from the previous month, and was unchanged year over year.

Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) for May is 56.7, 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.                   .

ELFA president and CEO William G. Sutton, CAE, said: “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. It is our hope that this trend pushes into the second half of the year.”

Paul J. Menzel, president and CEO, Financial Pacific Leasing, LLC, said: “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. 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.”