The most recent report from the Equipment Leasing and Financing Association (ELFA), a thought leader in the manufacturing and finance industry, has released findings of some gains in the sector. The Monthly Leasing and Finance Index, a study that gathers economic data from 25 businesses in the $827 billion industry, revealed that overall business orders and revenues moved upward in January. According to the report, new business volume increased to $6 billion, a 2 percent uptick from January 2013. Business volume was down 44 percent at the end of 2013, due in part to typical winter declines in new orders.
Report findings show mixed results
During the first month of 2013, receivables over 30 days were recorded at 1.8 percent, a slight decline from December’s 1.9 percent. During that same period, delinquencies held steady at the same rate as prior months.
Charge offs have also remained stagnant over the past three months, resting at an all-time low of 0.3 percent. Furthermore, headcount for equipment leasing organizations was up a total of 0.7 percent from last year, while confidence for February reached 63.3, the second highest rating in two years.
“At the start of the new year, equipment finance activity picked up where it left off for most of 2013,” ELFA President and CEO William G. Sutton said. “New business volume shows modest, incremental growth while credit losses continue at historic lows.”
Bolstering this positive news is the fact that credit approvals remain high – 76.9 percent – though this does represent a slight dip from December’s rate of 78.3 percent. However, 54 percent of those surveyed said they have seen more transactions come through for approval during January. While this is a decrease from December’s 57 percent findings, the numbers are positive compared to those recorded at the height of the recession.
Sutton says the gains found over the past several months are due in part to fizzling hostilities toward fiscal policies in the nation’s capital, combined with potentially positive economic forecasting for the near future.
“With fiscal pressures in Washington subsiding, at least for the time being, and most major U.S. economic indicators showing positive signs, we are hopeful that these factors will help promote a favorable climate for continued investment by U.S. businesses in capital equipment in 2014 and beyond,” Sutton said.
As the frigid winter temperatures fade into spring and summer, experts in the field anticipate even more growth as companies around the country invest in new business equipment and technology to propel revenues forward.
Small business leaders and entrepreneurs who are interested in improving business practices and bringing in more revenue may want to consider leasing for their organizations. Leasing provides the flexibility to not only stay up to date with the latest equipment and tech trends, but also grants entrepreneurs the option to test drive new equipment before making large financial investments all at once. Decision makers should contact National Funding to find out more about leasing options.