New business volumes for equipment finance spiked at the end of 2017, according to the latest data from the Equipment Leasing and Finance Association (ELFA).
Overall new business volume for December was $12.8 billion, up 6% year-over-year from new business volume in December 2016.
Volume was up 71% month-to-month from $7.5 billion in November, while cumulative new business volume for 2017 was up 5% from 2016.
Receivables over 30 days were 1.5%, unchanged from the previous month and up from 1.4% the same period in 2016. Charge-offs were 0.48%, up from 0.42% the previous month, and up from 0.42% in the year-earlier period. Credit approvals totaled 77.6% in December, up from 73.6% in November.
ELFA president and CEO Ralph Petta said: “December new business volume registered the typical end-of-quarter, end-of-year spike as member companies scrambled to close out the year. While 2017 was a good year, overall, for the equipment finance industry, most industry observers look for even stronger business activity in 2018.”
Outlining the reasons for this optimistic outlook, Petta listed a continued healthy and growing economy, an abundance of liquidity, strong capex demand buoyed by recent tax law changes, and a sense of confidence in the business community.”
Petta’s views were echoed by Thomas Jaschik, president BB&T Equipment Finance and one of the ELFA survey respondents.
Jaschik said: “Industry participants are very bullish on the prospects for 2018. With lower corporate taxes and favorable interest rates and credit environment, as well as an economy poised to breakout from its pattern of modest growth, I believe these dynamics will create the perfect storm to accelerate growth in the equipment finance industry in 2018.”