Equipment Leasing & Finance: New Business Volume Up 2%

The Equipment Leasing and Finance Association’s (ELFA) Monthly Leasing and Finance Index, which reports economic activity for the $521 billion equipment finance sector, showed overall new business volume for July at $5.7 billion, up 2% from volume in the same period in 2010.

Compared with June volume of $7.3 billion, July volume decreased by 22%. Year to date, new business volume is up 24% over last year. However, the percentage of responding companies that experienced a drop in volume from the year earlier period rose to 36%.

Credit quality is mixed, the association reported. Receivables over 30 days increased 8% to 2.7% in July from 2.5% in June, but declined by 21% compared to the same period in 2010. Charge-offs decreased 37% in July from the previous month and decreased by 50% from the same period in 2010.

Credit standards tightened in July as the number of lease applications approved decreased to 76.3% from 78.7% the previous month. Fifty-nine percent of participating organizations reported submitting more transactions for approval during the month, a decrease from 63% in June.

Finally, total head count for equipment finance companies in July showed no significant change month to month and year over year. Supplemental data show that the construction industry and small and medium-sized enterprises led the underperforming sectors. ◆