So far this year cumulative new business volume is up 5% compared to 2016 according to research by the Equipment Leasing and Finance Association (ELFA), which also shows a jump in new business during June.So far this year cumulative new business volume is up 5% compared to 2016 according to research by the Equipment Leasing and Finance Association (ELFA), which also shows a jump in new business during June.
ELFA’s monthly leasing and finance index (MLFI-25) puts new business volume for last month at $9.8 billion, up 27% month-to-month from $7.7 billion in May, but down 2% year-over-year from June 2016.
Ralph Petta, ELFA president and CEO, said: “Industry volume strengthened in the second quarter, building on strong capex investment in the prior quarter. Business owners are taking advantage of low interest rates, favorable employment data, an equity market that continues to defy gravity, and other solid fundamentals to replace aging assets and, in some cases, expand operations, requiring installation of new equipment.”
Petta went on to note: “Despite scattered reports of rising delinquencies and charge offs, credit markets continue to perform well. The wild card is whether markets will continue to grow despite gridlock in Washington, D.C., and other headwinds or eventually pull back as a result.”
David Gilmore, senior vice president, global marketing and sales at John Deere Financial, said: “Customer confidence in our key market segments (agricultural and construction) showed signs of improvement through the second quarter. Stabilization of agricultural commodity prices and rationalization of previously high levels of excess used equipment allowed customers to invest in newer technology and selectively update their fleets.”
“Rental utilization, a key indicator of US construction market strength, is moving in a positive direction as construction investment in residential, commercial and institutional sectors offset slow oil/gas and government sector growth. Long-term clarity around trade and tax policy could solidify short-term positive market trends,” Gilmore added.
ELFA software guide
Separately, ELFA has released its 2017 Software Guide, which highlights the leading software solutions for the industry and outlines some key technology trends for equipment finance companies in 2017, adapted from the association’s Business Technology Performance Index.
The research suggests replacement of front- and back-end systems remains a top initiative for equipment finance, while other key initiatives include business intelligence improvements, electronic signature solutions and better integration with various systems.
Ramping up mobile capabilities is a priority area that equipment finance companies hope to focus on, particularly as customer demands are increasing, notably in areas such as requests for online execution of documents and online payment capabilities.