ELFA’s Website Offers Wider Range of Resources for Financing Equipment

Visitors to the Equipment Leasing and Finance Association‘s end-user website, Equipment Finance Advantage, will find new enhancements that make it a more powerful resource for helping businesses take advantage of the benefits of financing equipment. The site, found at www.EquipmentFinanceAdvantage.org, has improved navigation for a better user experience and offers a wider range of resources focused on how companies of all types and sizes can use leasing and financing to their strategic advantage to acquire the equipment they need to operate and grow. ELFA launched the original Equipment Finance Advantage website two years ago.

Highlights of the site’s user-friendly content include:

  • Equipment Finance 101: Overview of the benefits of equipment finance, the types of financing, the top 10 questions to ask before entering an equipment financing agreement, a customizable digital toolkit and more.
  • Success Stories: Real-world examples of companies using equipment finance for strategic advantage.
  • Resources: How-to articles, Q&As, updated end-user industry fact sheets, infographics and more to help businesses develop their financing strategy.
  • Videos: A series of short videos on a range of topics, from maximizing cash flow to staying ahead of the curve to end-of-lease factors to consider.
  • Find a Provider: A searchable list of ELFA members that provide equipment leasing and finance services.

“The critical role the $903 billion equipment finance industry plays in the U.S. economy, manufacturing and jobs is fundamentally because of the participation of individual businesses,” says ELFA President and CEO William G. Sutton, CAE. “They have found the information at Equipment Finance Advantage to be an invaluable resource informing their equipment leasing and financing decision-making during the past two years, and we are excited to offer the newly upgraded EFA website to help keep them up-to-date with the latest research and informational content available.”

ELFA Reports Equipment Finance Sector Business Volume Up 13 Percent Since August 2013

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 $827 billion equipment finance sector, showed their overall new business volume for August was $7.2 billion, up 13 percent from new business volume in August 2013. Month over month, new business volume was down 9 percent from July. Year to date, cumulative new business volume increased 6 percent compared to 2013.

Receivables over 30 days increased from the previous month to 1.3 percent, and were up from 1 percent in the same period in 2013. Charge-offs were unchanged for the fifth consecutive month at an all-time low of 0.2 percent.

Credit approvals totaled 79.5 percent in August, a slight decrease from 80.3 percent the previous month. Total headcount for equipment finance companies was up 1 percent year over year.

Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) for September is 60.2, an increase from the previous month’s index of 58.9.

ELFA President and CEO William G. Sutton, CAE, said: “Continued strength in new business volume reflects the uptick in overall economic activity most economists forecast for the second half of 2014. Solid fundamentals—modest GDP growth; an improving labor market; increased consumer spending, as evidenced by strong auto sales; and low interest rates—all bode well for continued business investment in general, and the equipment finance sector, in particular. Credit quality appears manageable as well, although the index shows a slight uptick in delinquencies. Tempering this relatively good news is concern over recent geopolitical events relating to the fight against terrorism.”

Larry R. Stevens, President and Chief Executive Officer, Med One Capital, said, “The YTD-2014 metric measured by the MLFI-25 demonstrates a solid year in the equipment finance industry. If the month-to-month trends continue for the remainder of 2014, our industry will experience the strongest new business performance since well before the beginning of the recession. The industry seems to have recovered much of the strength and momentum that was lost during the financial meltdown and resultant uncertainties experienced in 2009 and 2010. This trend is largely consistent with what we are experiencing in healthcare equipment financing. The high quality reflected in the portfolios of the reporting companies demonstrates that in the face of increasing volume, credit quality remains a high priority within our industry. If this continues, it will serve us well as pressure grows to increase new business volumes in the years ahead.”

The MLFI-25 is the only 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 now.

Equipment Leasing and Finance Industry Confidence at Two-Year High for Third Consecutive Month

The Equipment Leasing & Finance Foundation (the Foundation) has released the May 2014 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI). Designed to collect leadership data, the index reports a qualitative assessment of the prevailing business conditions and expectations for the future as reported by key executives from the $827 billion equipment finance sector. Overall, confidence in the equipment finance market is 65.4, relatively unchanged from 65.1 last month, peaking at the highest index level in two years for the third consecutive month.

When asked about the outlook for the future, MCI survey respondent, Valerie Hayes Jester, President, Brandywine Capital Associates, Inc., said, “We have experienced a transaction flow that appears to be returning to a more normal state after the winter slowdown. Companies seem to be getting back on track and ordering equipment that should have been delivered in the first quarter. I am still concerned with the longer term effects of the many changes in our healthcare system as well as still undetermined tax policies that have great impact on small businesses.”

May 2014 Survey Results:
The overall MCI-EFI is 65.4, relatively unchanged from the April index.

When asked to assess their business conditions over the next four months, 31.4% of executives responding said they believe business conditions will improve over the next four months, down from 37% in April. 68.6% of respondents believe business conditions will remain the same over the next four months, up from 60% in April. No one believes business conditions will worsen, down from 2.9% the previous month.

34.3% of survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, down from 37% in April. 65.7% believe demand will “remain the same” during the same four-month time period, up from 60% the previous month. No one believes demand will decline, down from 2.9% who believed so in April.

28.6% of executives expect more access to capital to fund equipment acquisitions over the next four months, unchanged from April. 71.4% of survey respondents indicate they expect the “same” access to capital to fund business, and no one expects “less” access to capital, also both unchanged from the previous month.

When asked, 40% of the executives reported they expect to hire more employees over the next four months, an increase from 37% in April. 51.4% expect no change in headcount over the next four months, down from 60% last month. 8.6% expect fewer employees, up from 2.9% who expected fewer employees in April.

2.9% of the leadership evaluates the current U.S. economy as “excellent,” 91.4% of the leadership evaluates the current U.S. economy as “fair,” and 5.7% rate it as “poor,” all unchanged from April.

37% of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, an increase from 34.3% who believed so in April. 62.9% of survey respondents indicate they believe the U.S. economy will “stay the same” over the next six months, unchanged from April. No one believes economic conditions in the U.S. will worsen over the next six months, a decrease from 2.9% who believed so last month.

In May, 45.7% of respondents indicate they believe their company will increase spending on business development activities during the next six months, an increase from 40% in April. 54.3% believe there will be “no change” in business development spending, a decrease from 60% last month. No one believes there will be a decrease in spending, unchanged from last month.

Survey results are posted on the Foundation website, included in the Foundation Forecast newsletter and included in press releases. Survey respondent demographics and additional information about the MCI are also available at the link above.

Equipment Finance Market Achieves Highest Index in Two Years

The Equipment Leasing & Finance Foundation has released the March 2014 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI). Designed to collect leadership data, the index reports a qualitative assessment of the prevailing business conditions and expectations for the future as reported by key executives from the $827 billion equipment finance sector. Overall, confidence in the equipment finance market is 65.1, the highest index in two years and an increase from the February index of 63.3. The first quarter MCI levels are the three highest since April 2011.

When asked about the outlook for the future, MCI survey respondent Daryn Lecy, vice president of Operations, Stearns Bank N.A. Equipment Finance Division, says: “Considering we are coming off what are typically slower months and the likelihood that our extra-aggressive winter further impacted new business, we remain optimistic for 2014. We are fortunate to be experiencing year-over-year growth, increasing demand, and overall solid delinquency levels.”

March 2014 Survey Results
The overall MCI-EFI is 65.1, an increase from the February index of 63.3.

    When asked to assess their business conditions over the next four months, 31.4 percent of executives responding said they believe business conditions will improve over the next four months, up from 21.2 percent in February. Sixty-five point seven percent of respondents believe business conditions will remain the same over the next four months, down from 72.7 percent in February. And 2.9 percent believe business conditions will worsen, down from 6.1 percent who believed so the previous month.

    Just more than 31 percent of survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, up from 24.2 percent in February. And 62.9 percent believe demand will “remain the same” during the same four-month time period, down from 69.7 percent the previous month. Another 5.7 percent believe demand will decline, down from 6.1 percent who believed so in February.

    Thirty-one point four percent of executives expect more access to capital to fund equipment acquisitions over the next four months, unchanged from February. And 68.6 percent of survey respondents indicate they expect the “same” access to capital to fund business, up from 65.5 percent in February. No one expects “less” access to capital, down from 3.1 percent who expected less access the previous month.

    When asked, 40 percent of the executives reported they expect to hire more employees over the next four months, relatively unchanged from February. The other 60 percent expect no change in headcount over the next four months, up from 53 percent last month. No one expects fewer employees, down from 6.3 percent who expected fewer employees in February.

    Five point seven percent of the leadership evaluates the current U.S. economy as “excellent,” up from 3 percent last month. While 88.6 percent of the leadership evaluates the current U.S. economy as “fair,” down from 93.8 percent last month. And 5.7 percent rate it as “poor,” up from 3 percent last month.

    When asked, 31.4 percent of the of survey respondents believe that U.S. economic conditions will get “better” over the next six months, a decrease from 34.4 percent who believed so in February. And 68.6 percent of survey respondents indicate they believe the U.S. economy will “stay the same” over the next six months, an increase from 59.4 percent in February. No one believes economic conditions in the U.S. will worsen over the next six months, a decrease from 6.2 percent last month.

    In March, 45.7 percent of respondents indicate they believe their company will increase spending on business development activities during the next six months, a decrease from 56.3 percent in February. Another 54.3 percent believe there will be “no change” in business development spending, an increase from 43.8 percent last month. No one believes there will be a decrease in spending, unchanged from last month.

March 2014 MCI Survey Comments from Industry Executive Leadership

Bank, Small Ticket
“We continue to see strong growth in both applications and origination volume. We are optimistic that this trend will continue as we close out the first quarter. In addition, portfolio performance in terms of delinquencies remains very low.” David Schaefer, CEO, Mintaka Financial, LLC

Independent, Middle Ticket
“New business volume targets in our truck transportation business continue to be met or exceeded by our over 2,300 dealers nationwide in the U.S., suggesting continued strength in the economy.” William Besgen, President & COO, Hitachi Capital America Corp.

Bank, Middle Ticket
“The overall economy is fair; however, I do see an increase in capital expenditures in 2014. The capital expenditures will be made to reduce labor cost and/or replace outdated or worn out equipment.” Elaine Temple, President, Bancorpsouth Equipment Finance

Why an MCI-EFI?
Confidence in the U.S. economy and the capital markets is a critical driver to the equipment finance industry. Throughout history, when confidence increases, consumers and businesses are more apt to acquire more consumer goods, equipment and durables, and invest at prevailing prices. When confidence decreases, spending and risk-taking tend to fall. Investors are said to be confident when the news about the future is good and stock prices are rising.

Who participates in the MCI-EFI?
The respondents are comprised of a wide cross section of industry executives, including large-ticket, middle-market and small-ticket banks, independents and captive equipment finance companies. The MCI-EFI uses the same pool of 50 organization leaders to respond monthly to ensure the survey’s integrity. Since the same organizations provide the data from month to month, the results constitute a consistent barometer of the industry’s confidence.

How is the MCI-EFI designed?
The survey consists of seven questions and an area for comments, asking the respondents’ opinions about the following:
1. Current business conditions
2. Expected product demand over the next four months
3. Access to capital over the next four months
4. Future employment conditions
5. Evaluation of the current U.S. economy
6. U.S. economic conditions over the next six months
7. Business development spending expectations
8. Open-ended question for comment

How may I access the MCI-EFI?
Survey results are posted on the Foundation website, included in the Foundation Forecast newsletter and included in press releases. Survey respondent demographics and additional information about the MCI are also available at the link above.

Equipment Finance Market Experiences Highest Confidence Level in Two Years

The Equipment Leasing & Finance Foundation has released the January 2014 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI). Designed to collect leadership data, the index reports a qualitative assessment of the prevailing business conditions and expectations for the future as reported by key executives from the $827 billion equipment finance sector. Overall, confidence in the equipment finance market is 64.9, the highest confidence level in two years, and an increase from the December index of 55.8. An improved general outlook for economic activity among industry leadership contributed to the increase.

When asked about the outlook for the future, MCI survey respondent David Schaefer, CEO, Mintaka Financial LLC, says: “We’re optimistic about 2014 as we come off of a very strong Q4. The recent federal budget deal is positive since it takes some uncertainty out of the market. Employment gains were also positive and this should bring more equipment demand and, therefore, financing opportunities. Margins are still being compressed as capital is abundant but demand remains fairly neutral.”

The overall MCI-EFI is 64.9, an increase from the December index of 55.8.

When asked to assess their business conditions over the next four months, 33 percent of executives responding said they believe business conditions will improve over the next four months, up from 12 percent in December. Sixty-one percent of respondents believe business conditions will remain the same over the next four months, down from 78.8 percent in December. Five and two-thirds percent believe business conditions will worsen, down from 9 percent who believed so the previous month.

Thirty-six percent of survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, up from 15.2 percent in December. Sixty-one percent believe demand will “remain the same” during the same four-month time period, down from 78.8 percent the previous month. Just under 3 percent believe demand will decline, down from 9 percent who believed so in December.

Twenty-five percent of executives expect more access to capital to fund equipment acquisitions over the next four months, relatively unchanged from December. Seventy-five percent of survey respondents indicate they expect the “same” access to capital to fund business, and no one expects “less” access to capital, both also unchanged from the previous month.

When asked, 33 percent of the executives reported they expect to hire more employees over the next four months, an increase from 27.3 percent in December. More than 58 percent expect no change in headcount over the next four months, down from 60.6 percent last month. Just over 8 percent expect fewer employees, down from 12 percent who expected fewer employees in December.

Just under 3 percent of the leadership evaluates the current U.S. economy as “excellent,” down from 6 percent last month. And 94.4 percent of the leadership evaluates the current U.S. economy as “fair,” up from 85 percent last month. Just under 3 percent rate it as “poor,” down from 9 percent in December.

About 42 percent of the of survey respondents believe that U.S. economic conditions will get “better” over the next six months, an increase from 24.2 percent who believed so in December. And 55.6 percent of survey respondents indicate they believe the U.S. economy will “stay the same” over the next six months, a decrease from 66.7 percent in December. Just under 3 percent believe economic conditions in the U.S. will worsen over the next six months, a decrease from 9 percent in December.

In January, 55.6 percent of respondents indicate they believe their company will increase spending on business development activities during the next six months, an increase from 30.3 percent in December. Thirty-nine percent believe there will be “no change” in business development spending, a decrease from 66.7 percent last month. About 6 percent believe there will be a decrease in spending, an increase from 3 percent who believed so last month.