Business Volume Rises in Equipment and Leasing Sector

In the equipment finance sector, new business volume rose 1% year-over-year in August, according to the Monthly Leasing and Finance Index from the Equipment Leasing and Finance Association (ELFA). The index takes economic data from 25 companies representing the $1 trillion equipment finance sector. Year to date, cumulative new business volume rose 6% compared to 2016.

Credit approvals were down slightly from July, totaling 75.3%. Head count for equipment finance companies was up 17% year-over-year, though this was mostly due to acquisition activity at one of the reporting companies. Receivables over 30 days were 1.5%, an increase from 1.4% in July and 1.3% in the same period last year.

A separate index, the Equipment Leasing and Finance Foundation’s Monthly Confidence Index, registered 63.7 for September, down from 64.4 in August.

“After a relatively strong second quarter in which growth in the overall economy is in the 3-percent range, end-of-summer equipment financing volume also is on solid footing,” said ELFA President and CEO Ralph Petta in a release. “U.S. business owners appear optimistic about the health of the economy, providing impetus for them to grow their businesses. … With low unemployment, healthy consumer spending, and equities and fixed-income markets at historic highs, the economy is in good shape. This bodes well for continued investment in equipment by businesses, both large and small.”

“The equipment leasing and finance industry continues to support capital formation in the U.S. with a 5.5-percent uptick in new business volume through eight months of 2017 compared to eight months of 2016,” said Robert Neagle, president and general manager, Merchant Finance Division, Ascentium Capital LLC, in the release. “As has been the pattern throughout the past couple of years, the expectation is for a stronger third quarter end.  While there was a slight move up in delinquency in August, asset quality continues hovering in a fairly consistent range month-to-month. The summer is over and so is any seasonal leveling of new business volume.”

– Adam Fusco, associate editor

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