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ELFA: March New Business Volume Up 10% YOY & Up 36% versus February

April 24, 2012, 08:20 AM

The Equipment Leasing and Finance Association’s (ELFA) Monthly Leasing and Finance Index (MLFI-25), which reports economic activity for the $628 billion equipment finance sector, showed overall new business volume for March was $6.8 billion, up 10% from volume of $6.2 billion in the same period in 2011. Volume was up 36% from the previous month. Year-to-date cumulative new business volume is up 17%.

Receivables over 30 days increased to 2.8% in March, up from 2.5% in February, and down by 20% compared to the same period in 2011. Charge-offs increased to 0.7%, up from 0.5% the previous month, and down by 46% compared to the same period last year.
Credit approvals dipped slightly to 78%  in March from 79% in February.  More than 66% of participating organizations reported submitting more transactions for approval during March, up from 62% in February.

Finally, total headcount for equipment finance companies in March decreased 0.7% from the previous month, and was down 3.4% year over year. Supplemental data show that the construction and trucking industries continued to lead the underperforming sectors.
Separately, the Equipment Leasing & Finance Foundation's Monthly Confidence Index (MCI-EFI) for April is 62.1, up slightly from the March index of 61.7, and the fourth consecutive month of increases, indicating industry participants’ optimism is slowly but steadily rising. For more detailed information on the MCI-EFI visit

ELFA President and CEO William G. Sutton, CAE, said: “Growth in new business volume appears to be easing somewhat as we head into the summer months. Increases in originations of the magnitude we have experienced during the past two to three years in a recovery mode are probably not sustainable. Nevertheless, a 10%  rate of growth for the period continues a positive trend by businesses to make capex investments in productive assets. Credit quality metrics appear to be stabilizing, returning to pre-recession levels.”

John McQueen, Executive Vice President and Head of Wells Fargo Equipment Finance, headquartered in Minneapolis, MN, said, “We started to see a positive change in the equipment finance market in Q4-2010 with increased demand and reduced portfolio delinquency.  In my perspective, demand for new equipment was being driven by a combination of factors. These factors include the replacement cycle for older equipment that businesses had been using for longer periods due to a weakening economy as well as companies focusing on acquiring equipment to improve efficiency.  As we enter 2012, we’ve seen a continuation of these trends as Wells Fargo Equipment Finance had record financial performance in 2011, and we continued this momentum during Q1 with 11.5% year-over-year volume growth, a 17.0% backlog increase, strong transaction spreads, and continued portfolio quality improvement.”

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