The Equipment Leasing and Finance Association’s (ELFA) Monthly Leasing and Finance Index (MLFI-25), which reports economic activity for the $518 billion equipment finance sector, showed overall new business volume for March declined nine percent when compared to the same period in 2009. When compared to the prior month, the MLFI-25 reported new business volume increased by 34 percent, from $3.2 billion to $4.3 billion. In fact, March originations represent the strongest showing in that category thus far this year.

Delinquencies improved markedly as well. Receivables over 30 days declined sharply to 4.2 percent, down from 5.7 percent in the prior month and 4.9 percent in the year-earlier period. Charge-offs decreased to 1.54 percent, down from 1.89 percent in the prior month. Losses have dropped to levels unseen during past 14 months.

Credit approvals decreased to 68 percent in March, up from 64 percent in the same period the prior year. Of participating organizations, 62 percent reported submitting more transactions for approval during the month. Not since September 2008 have a larger percentage of respondents reported putting more transactions through the credit approval process. Finally, total headcount for equipment finance companies decreased by two percent in the February-March period.

And, once again, the construction and trucking transportation industries led the underperforming sectors.

“Demand for equipment leasing appears to be on the upswing,” said David Schaefer, President, Orion First Financial, LLC, located in Gig Harbor, WA. “We are seeing delinquencies begin to stabilize and losses have been improving over the past six months. While the economy and leasing industry are both a long ways away from getting back to where they once were, it appears that business and consumer confidence is building.”

Schaefer added, “Business decision makers are beginning to focus on how they can grow their companies versus contracting them and as such we expect capital expenditures to gain momentum as the year progresses.”

“Signs of lower credit losses are encouraging,” said Ralph Petta, ELFA interim President. “While the level of new business volume continues to reflect rather sluggish demand for equipment financing, we are nevertheless optimistic that the economy will continue to strengthen, providing a more favorable climate for businesses to invest in productive assets.”