The Equipment Leasing and Finance Association (ELFA) recently released its Monthly Leasing and Finance Index, a tool that gathers economic data from 25 countries across the leasing and finance sector. The study was positive overall, reporting signs of growth across the $827 billion sector.
New business volume in March reached $7 billion, up 3 percent from March 2013. Since February, new business volume increased by 30 percent, and total yearly business volume increased by 6 percent from 2013.
This data has led to increased confidence on the part of William G. Sutton, CEO of president of ELFA.
“Equipment finance companies in almost all industry sectors are reporting a strong first quarter of the year,” Sutton said in a statement. “The March data showing new business volume clearly provides evidence of a strong first quarter looking back and a positive forecast for future activity.”
Confidence up across the equipment leasing industry
The good news didn’t stop there – total headcount for companies in the sector increased by 4.4 percent over 2013, a positive sign for expansion and boosted leasing rates. Furthermore, monthly receivable rates increased from 1.8 percent in February to 2.1 percent in March and experienced an uptick from the 2 percent recorded in March 2013.
While the majority of the study reported growth across the industry, credit quality data was mixed. On a positive note, credit approvals rose to 77.8 percent in March, up from 75.3 percent the month prior. Approximately 65 percent of survey participants reported an upswing in transaction rates and approvals during March, up from 53 percent in February. Despite the boon in transactions, Sutton was reserved in his remarks regarding credit data, as delinquencies ticked upward.
“Credit quality metrics are mixed, with delinquencies edging upward counterbalanced by monthly losses reaching historic lows,” Sutton said. However, Sutton continued, “Another positive sign for the industry is the trend toward increased hiring during the past 10 months.”
Making the most of equipment leasing and finance availability
Overall advancements in the sector benefit more than just companies in the industry. As hiring and equipment leasing rates improve, more businesses may be able to take advantage of these increases. Improved equipment leasing options provide companies of all sizes with the ability to move forward and meet their organizational goals.
For example, staying on top of technological trends has become more important than ever, as consumers turn to tablets and mobile devices not only for entertainment but for shopping and searching for company reviews every day. Not only do these tech advances help businesses bring in new customers, they also help small businesses keep up with large scale competitors.
Unfortunately, these devices are expensive and often become outdated in a matter of years, if not months. However, when companies take advantage of equipment leasing and financing options, decision makers are able to explore technology without fully committing to a product. Instead, organizations can take equipment for a test drive – at the end of a lease term, entrepreneurs can decide if they would like to fully invest in a product, extend their lease or opt for a new product altogether. Those interested in these options should contact National Funding to find out more.