Equipment sector on “rollercoaster”

The Equipment Leasing and Finance Association’s (ELFA’s) monthly leasing and finance index (MLFI-25), which reports economic activity from 25 companies representing a cross section of the equipment finance sector, showed their overall new business volume for July slumped to $7 billion, down 17% year-over-year from new business volume in July 2015.

Volume was down 30% month-to-month after a spike to $10 billion in June. Year to date, cumulative new business volume decreased 8% compared to 2015.

Receivables over 30 days were 1.3%, a decrease from the previous month and up from 1.01% in the same period in 2015. Credit approvals totaled 75.9% in July, down from 78.1% in June.

Ralph Petta, ELFA president and CEO, said: “July’s new business volume to begin the third quarter continues the rollercoaster ride that is the equipment finance sector in 2016. Positive fundamentals in the US economy, which include a recent strong jobs report, lower unemployment and a bullish equities market, are offset by sluggish overall growth in the US economy and stagnant capex spending by businesses both large and small.”

“As the presidential campaign moves into higher gear, it appears business owners continue their wait-and-see attitude toward investment in and expansion of their business operations. Credit quality also follows this up-and-down pattern, but continues to show some deterioration when compared to the same period 12 months ago,” Petta added.