Trends

 

06 27 2013

06 27 2013

Equipment Leasing Industry Sees Big Gains in May

The economy continues to regain its pre-recession form. Because of that, U.S. small businesses have heightened their performance expectations and have become increasingly more optimistic now that the economic environment has improved. As confidence rises, entrepreneurs have shaken loose the chains of restrictive business conditions and have started focusing on bettering their operations, with many making infrastructure investments through equipment financing.

ELFA indexes rises

According to the Monthly Leasing and Finance Index maintained by the Equipment Leasing and Finance Association, the equipment financing sector – which has an estimated value near $725 billion – experienced a 21 percent increase in business during May 2013 compared to the same month last year.

New business volume stood at $7.5 billion during May, but was relatively unchanged from April 2013. For the year to date, new business has risen 11 percent compared to 2012.

Sixty-three percent of organizations that participate in the monthly index survey reported processing more transactions for approval during May. The number is a slight drop from the 72 percent achieved during the month before, but Equipment Leasing & Finance Association (ELFA) President and CEO William Sutton noted all other indicators point to a healthy equipment financing sector poised to grow even more.

“May [index] data suggest an equipment finance sector on the verge of a breakout performance,” Sutton said. “While recent key indicators show an overall improvement in lending to the small business sector, the May numbers provide concrete evidence of growing demand for productive assets by a cross section of the business community. At the same time, historic lows in delinquencies and charge-offs mean American businesses are better able to meet their financial obligations, creating a favorable environment for additional working capital investment and job creation. We hope that these trends will continue into the summer.”

The May increase in business fed into greater optimism among organizations in the equipment leasing sector. ELFA’s monthly measure of confidence in June rose to 57.3, an improvement from the 56.7 seen during May.

In the accompanying survey to the confidence index, nearly 19.4 percent of respondents expect greater demand for leasing and loans during the next four months, which improved upon the 12.9 percent who said the same in May.

As evidenced by the sector sentiment and data, equipment financing will be a key target for small business owners moving forward. Entrepreneurs looking for their best option to upgrade and replace old infrastructure can consult with National Funding, an equipment leasing company, on a range of available options to keep their businesses up-to-date and running smoothly.

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