“Stability & positive velocity” recorded by American lessors

American lessors’ new business volume for January was $6bn, up 2% from new business volume in January 2013.  However, volume was down 44% from December, following the typical end-of-quarter, end-of-year spike in new business activity. 

The Equipment Leasing and Finance Association’s (ELFA) Monthly Leasing and Finance Index indicates that receivables over 30 days were at 1.8% in January, down slightly from 1.9% in December.  Delinquencies were unchanged from the same period in 2013.  Charge-offs were unchanged from the previous two months at the all-time low of 0.3%.

Credit approvals totaled 76.9% in January, a decrease from 78.3% the previous month.  Some 54% of participating organizations reported submitting more transactions for approval during January, a decrease from 57% December.

Finally, total headcount for equipment finance companies was up 0.7% year over year.

Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index for February is 63.3, the second highest index in two years and off slightly from last month’s two-year index high of 64.9.

ELFA president and CEO William G. Sutton, CAE, said: “At the start of the New Year, equipment finance activity picked up where it left off for most of 2013. New business volume shows modest, incremental growth while credit losses continue at historic lows.”

He added: “With fiscal pressures in Washington subsiding, at least for the time being, and most major US economic indicators showing positive signs, we are hopeful that these factors will help promote a favorable climate for continued investment by US businesses in capital equipment in 2014 and beyond.”    

Martha Ahlers, VP/COO, United Leasing, Inc., said: “The Monthly Confidence Index results for the last two reported periods provide continued optimism for the year ahead.  Beginning 2014 with a 63.3 MCI, the second highest mark in the last 24 months, is also extremely promising and serves as evidence of stability and positive velocity within our industry.  In the Monthly Leasing and Finance Index, origination volumes year-over-year are also up, while maintaining historically low delinquency and charge-offs; an indication of continued health.  The combination of these positive indicators creates a huge amount of excitement for potential growth.”