The US equipment leasing industry has seen
month-on-month growth in business levels and in investment
confidence, according to reports released by the Equipment Leasing
and Finance Association (ELFA).
New business volumes for August were $6.9bn
(€5.4bn), a 21% increase on the $5.7bn reported for the same period
last year and a 5% increase on the $6.6bn reported in for July,
according to the Monthly Leasing and Finance Index (MLFI-25) survey
of 25 ELFA companies.
The report also showed receivables over 30
days were down to 1.9% from 2.2% in July, and charge-offs remained
unchanged from July at 0.4%, representing a 33% decrease since last
William Sutton, ELFA president and chief
executive , said: “The pace of new equipment financing continued
throughout the summer months as the housing sector, for one, showed
signs of a rebound. However, businesses, both large and small,
continue to build up cash reserves, indicating lingering
apprehension over increasing energy prices, instability in the Arab
world and a still-fragile eurozone economy.”
The increase in new business was reflected in
the Monthly Confidence Index for the Equipment Finance Industry
(MCI-EFI), which includes opinions from a regular pool of 50
organisation leaders. The September report showed an overall
confidence rating of 53 , up from 50.2% in August.
However, while 8.8% of executives believed
business conditions would improve in the next four months, up from
6.3% last month, 17.6% believed they would worsen, compared to
15.6% last month.
The confidence survey also shows that opinion
was divided among different market segments, with Valerie Hayes
Jester, president of small ticket finance provider Brandywine
Capital Associates felt the industry continued to post strong
results in terms of low delinquency levels and overall credit
quality of transactions while at the same time, George Booth, chief
executive of Black Rock Capital called the market “stagnant”.
Russell Nelson, president of Farm Credit
Leasing, predicted “continued industry expansion into 2013 and
beyond” while warning that “uncertainty in the economy, Europe,
employment, and upcoming US elections will impact the level of
growth recorded during the remainder of 2012.”