In the $1 trillion equipment finance sector, overall new business volume for July rose 13% year-over-year from July 2016. In its survey of economic activity among 25 companies, the Equipment Leasing and Finance Association's (ELFA) Monthly Leasing and Finance Index also indicated volume was down 19% month-to-month from June. Cumulative new business volume was up 6% from 2016.
"The second half of the year gets off to a strong start, with double-digit, year-over-year growth,” said ELFA President and CEO Ralph Petta. “Business fundamentals appear solid, with low unemployment, continued low interest rates and an active equities market buoying the economy. With a number of difficult public policy decisions on the horizon, all eyes will be on Washington in the coming months to glean whether this benign economic condition continues."
Credit approvals totaled 76% in July, hardly changed from what it was in June. Headcount totals for equipment finance companies was up 15.3% year-over-year, mostly due to acquisition activity from one company in the survey. Receivables over 30 days were 1.4%, up slightly from the previous month. Charge-offs were 0.35%, down somewhat from June. The separate Equipment Leasing and Finance Foundation’s Monthly Confidence Index registered 64.4, up from 63.5 the prior two months.
"It is promising to see such a great start to Q3 for our industry,” said Michael Sweeney, senior vice president of vendor equipment finance originations at EverBank Commercial Finance Inc. “While we all know that a great month doesn't make a quarter, it is particularly gratifying to see that new business volume for our industry is up by 6% over 2016 through the first seven months. Portfolio performance continues to be a source of comfort despite a recent uptick in delinquencies, as indicated by a slight decrease in charge-offs as contrasted with the prior year and month. Stable credit approval rates and our continued strong confidence index indicate … that it is a great time to be in the equipment finance business."
– Adam Fusco, associate editor