August New Business Volume Up 4 Percent Year-over-year, Down 13 Percent Month-to-month, Up 5 Percent Year-to-date
WASHINGTON, Sept. 26, 2022 (GLOBE NEWSWIRE) — The Equipment Leasing and Finance Association’s (ELFA) Monthly Leasing and Finance Index (MLFI-25), which reports economic activity from 25 companies representing a cross section of the $900 billion equipment finance sector, showed their overall new business volume for August was $8.8 billion, up 4 percent year-over-year from new business volume in August 2021. Volume was down 13 percent from $10.1 billion in July. Year-to-date, cumulative new business volume was up 5 percent compared to 2021.
Receivables over 30 days were 1.5 percent, down from 1.6 percent the previous month and down from 1.8 percent in the same period in 2021. Charge-offs were 0.17 percent, down from 0.18 percent the previous month and down from 0.23 percent in the year-earlier period.
Credit approvals totaled 75.2 percent, down from 78 percent in July. Total headcount for equipment finance companies was down 2.9 percent year-over-year.
Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) in September is 48.7, a decrease from 50 in August.
ELFA President and CEO Ralph Petta said, “August origination volume reflects an equipment finance industry that is fueling continued growth and expansion of businesses throughout the U.S. Up to this point at least, steadily rising interest rates do not appear to dampen enthusiasm of businesses that prefer the utilization of productive assets versus their ownership, which is the essence of the equipment finance sector. With the Fed’s most recent 75-basis point jump in short-term interest rates, and the prospect of a hard landing, time will tell whether—and to what extent—these same business owners continue to grow and invest in equipment.”
Thomas Sbordone, Managing Director and National Sales Manager, BMO Harris Equipment Finance, said, “While the economic data may be construed in any number of ways and can feel, at times, unsettling, the fundamentals of our equipment finance business remain strong. Companies invest in capital equipment, throughout all cycles, for a myriad of reasons and equipment obsolescence is certainly real. Productivity gains require capital and business owners are always seeking an edge on the competition. Once decision-makers get past the initial ‘sticker shock’ of seeing how their financing rates have climbed over the past year they make rational choices based on their individual circumstances. The August MLFI results look positive, generally, given the market environment with continued high inflation, supply chain issues and other challenges. It will be interesting to see the September end-of-quarter MLFI results when the effects of the Fed’s latest interest rate hike are clearer. A ‘wait and see’ approach never feels great, but we’re reminded that patience is a virtue.”
About ELFA’s MLFI-25
The MLFI-25 is the only near-real-time index that reflects capex, or the volume of commercial equipment financed in the U.S. The MLFI-25 is released globally at 8 a.m. Eastern time from Washington, D.C., each month on the day before the U.S. Department of Commerce releases the durable goods report. The MLFI-25 is a financial indicator that complements the durable goods report and other economic indexes, including the Institute for Supply Management Index, which reports economic activity in the manufacturing sector. Together with the MLFI-25 these reports provide a complete view of the status of productive assets in the U.S. economy: equipment produced, acquired and financed.
The MLFI-25 is a time series that reflects two years of business activity for the 25 companies currently participating in the survey. The latest MLFI-25, including methodology and participants, is available at www.elfaonline.org/knowledge-hub/mlfi-25-monthly-leasing-and-finance-index.
The MLFI-25 is part of the Knowledge Hub, the source for business intelligence in the equipment finance industry. Visit the hub at www.elfaonline.org/KnowledgeHub.
MLFI-25 Methodology
ELFA produces the MLFI-25 survey to help member organizations achieve competitive advantage by providing them with leading-edge research and benchmarking information to support strategic business decision making.
The MLFI-25 is a barometer of the trends in U.S. capital equipment investment. Five components are included in the survey: new business volume (originations), aging of receivables, charge-offs, credit approval ratios, (approved vs. submitted) and headcount for the equipment finance business.
The MLFI-25 measures monthly commercial equipment lease and loan activity as reported by participating ELFA member equipment finance companies representing a cross section of the equipment finance sector, including small ticket, middle-market, large ticket, bank, captive and independent leasing and finance companies. Based on hard survey data, the responses mirror the economic activity of the broader equipment finance sector and current business conditions nationally.
About ELFA
The Equipment Leasing and Finance Association (ELFA) is the trade association that represents companies in the nearly $1 trillion equipment finance sector, which includes financial services companies and manufacturers engaged in financing capital goods. ELFA members are the driving force behind the growth in the commercial equipment finance market and contribute to capital formation in the U.S. and abroad. Its 580 members include independent and captive leasing and finance companies, banks, financial services corporations, broker/packagers and investment banks, as well as manufacturers and service providers. ELFA has been equipping business for success for more than 60 years. For more information, please visit www.elfaonline.org.
Follow ELFA:
Twitter: @ELFAonline
LinkedIn: www.linkedin.com/groups?gid=89692
Facebook: www.facebook.com/ELFApage
ELFA is the premier source for statistics and analyses concerning the equipment finance sector. Please visit www.elfaonline.org/knowledge-hub/knowledge-hub-home for additional information.
Media/Press Contact: Amy Vogt, Vice President, Communications and Marketing, ELFA, 202-238-3438 or avogt@elfaonline.org
The stock market took a U-turn on Thursday, erasing all the gains it made on Wednesday as investors continued to worry about the impacts of high inflation and the interest rate hikes that central banks are implementing to get it back in check. As of 11:40 a.m. ET, the S&P 500 was down 2.1%, and the tech-heavy Nasdaq has lost 2.9%. Companies tied to the electric vehicle industry were getting hit especially hard, with Rivian Automotive (NASDAQ: RIVN) down 5% and Chinese luxury EV-maker Nio (NYSE: NIO) falling 8.2%.
Yahoo Finance Live takes a look at Micron's stock following its first-quarter earnings report.
At 2:05 p.m. ET today, Tesla (NASDAQ: TSLA) shares were trading near the lows of the day, down 7.1%. The company is ready to update investors over the next several days, but that isn't likely the reason for the big drop today. Over the upcoming weekend, Tesla will provide its third-quarter delivery data, if it sticks to its typical timeframe for those numbers.
Wall Street is on a roller coaster again, as investors try to navigate the path between high inflation and the Fed’s aggressive interest rate hikes. The former is raging – whether you blame Russia or Biden, the fact of high inflation can no longer be avoided – while the latter is rising – but whether it is rising fast enough to blunt inflation is yet to be determined. Jim Cramer, the well-known host of CNBC’s ‘Mad Money’ program, takes a hint from the bond market, where the US Treasury 2-year no
Yahoo Finance's Jared Blikre and Akiko Fujita discuss stocks extending losses on the back of jobless claims and other catalysts.
Shares of semiconductor specialist Advanced Micro Devices (NASDAQ: AMD) were falling today, likely in response to new data on U.S. jobless claims. Investors are processing the latest employment data that showed a stronger-than-expected labor market. Instead, it appears that AMD shareholders were reacting to the latest jobless claims report.
The broader market was down sharply and that was certainly impacting Carvana stock. As of 12:01 p.m. ET, Carvana stock was down 18.5%. First, let's recognize that Carvana is a volatile stock to begin with.
While EV-minded investors were accelerating into shares of QuantumScape (NYSE: QS) on Tuesday, they're shifting into reverse today. As of 12:02 p.m. ET, shares of QuantumScape are down 8.1%. In addition to the overall dour sentiment pervading the markets today, investors are choosing to unplug from QuantumScape's stock after learning of an analyst's recent outlook on the company and his price target on its shares.
If Carnival misses on earnings tomorrow, what will that mean for Royal Caribbean and Norwegian Cruise Line Holdings?
On the bright side of what has increasingly been a terrible year for stocks is that over time, history is filled with self-corrections and comebacks.
Yahoo Finance Live's Seana Smith looks at several trending stocks in the after-hours trading session.
ZIM Integrated Shipping Services (ZIM) closed at $25.39 in the latest trading session, marking a +1.68% move from the prior day.
Icahn Enterprises (IEP) closed at $50.25 in the latest trading session, marking a +1.09% move from the prior day.
Shares of Carmax dipped sharply after the company missed second-quarter earnings expectations.
Yahoo Finance Live anchor Seana Smith details a new report that Meta is planning to cut costs, freeze hiring, and restructure its teams.
The Dow Jones Industrial Average sold off Thursday after key economic data. Apple stock fell on a downgrade.
Apple has held up better than most tech stocks this year, but does it need to fall for the bear market to be over?
Yahoo Finance Live anchors discuss stock performance for Porsche.
Yahoo Finance Live anchors discuss second-quarter earnings for CarMax.
Markets are in "risk-off" mode again today with shares of companies in more speculative sectors like electric vehicles (EVs) taking some of the hardest hits. Shares of EV charging network company ChargePoint Holdings (NYSE: CHPT), for example, were down 5.2% as of 12:05 p.m. ET. The stocks of vehicle manufacturers Lordstown Motors (NASDAQ: RIDE) and Arrival (NASDAQ: ARVL) were lower by 7.2% and 6.8%, respectively.