The Equipment Leasing and Finance Association (ELFA), which reports economic activity from 25 companies representing a cross-section of the $725-billion equipment finance sector, showed that the industry’s overall new business volume for November was $6.4 billion, up 3% from volume of $6.2 billion in the same period in 2011.
The companies’ volume was down 16% from the previous month, and their year-to-date cumulative new business volume increased 15%. Receivables over 30 days increased for the first time in six months to 2.0%, up from 1.7% in October, and they were unchanged when compared to the same period in 2011.
Charge-offs were up from the previous month at 0.5%, and down by 28.6% compared to the same period last year. Credit approvals totaled 77.0% in November, down from 79.5% in October. Forty-six percent of participating organizations reported submitting more transactions for approval during November, down from 66% the previous month.
Finally, total headcount for equipment finance companies was down 1% from the previous month, and declined 2% year over year.
Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index for December is 48.5, a decrease from the November index of 49.9, reflecting industry participants’ concerns regarding the impact of fiscal issues on capital expenditures, despite an overall sense of optimism in the equipment finance industry.
“New business volume in the equipment finance sector of the U.S. economy continues to show slow, but steady, growth,” said ELFA President and CEO William G. Sutton. “Credit quality and portfolio performance also trend positively as delinquencies and losses remain under control.
“We are hopeful that, as recent ‘fiscal cliff’ negotiations between the White House and the Congress seem to be entering a decisive phase, businesses will interpret this as a sign that the economy gradually will pick up steam and is poised for a more robust recovery,” he added.
“For much of the year, we at GreatAmerica Financial Services had experienced a solid increase in our overall commercial equipment lease volume from throughout the country; however, as we edged our way into the fourth quarter, we began to feel the effects of the lack of clarity in Washington regarding the budget deficit,” said Tony Golobic, chairman and CEO, GreatAmerica Financial Services.