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Equipment Leasing Rises In June, Says Finance Survey

New business rose in June in the $600 billion equipment finance sector, accord

New business rose in June in the $600 billion equipment finance sector, according to a statement released by the The Equipment Leasing and Finance Association (ELFA) containing the organization's Monthly Leasing

New business rose in June in the $600 billion equipment finance sector, according to a statement released by the The Equipment Leasing and Finance Association (ELFA) containing the organization's Monthly Leasing and Finance Index (MLFI-25).

The data contained in the report indicates that new business rose by 9.5 percent from the same month in 2011 to reach $8 billion. Business volume surged 29 percent from the prior month. The new business gained since the beginning of the year rose 14.5 percent.

Rising activity

Receivables over the time of 30 days were 2.4 percent, which was lower than the 2.7 percent experienced in May, and also marginally lower than the same month in 2011. Charge-offs rose to 0.6 percent in June, from the 0.5 percent in May. The June figure represented a 45.4 percent plunge from the same month in 2011.

In June, the fraction of credit approvals rose to 78.7 percent from 78.3 percent in May. Almost two-thirds, or 65 percent of the organizations participating in the survey indicated that they had submitted more transactions for approval in June, which was lower than the fraction of 75 percent in May.

In addition, equipment finance companies boosted their total headcount slightly from the prior month, but fell 2.6 percent from the same month in 2011. Trucking and construction were among the sectors with the worst performance followed by small-to-medium sized businesses, according to supplemental data.

ELFA President and chief executive officer William G. Sutton, certified association executive, said in the statement that "despite recent reports of a softening economy, the level of capital investment by U.S. businesses--both large and small--continues to accelerate. In fact, the volume of equipment financed in June, as illustrated by the MLFI-25, surpasses that of any single month except for year-end December activity since the beginning of the Great Recession in 2008. We hope that, in spite of the factors adversely affecting economies overseas, our businesses here at home will be able to continue to invest in productive assets."

The July Equipment Leasing & Finance Foundation's Monthly Confidence Index was 51.5, compared to the June reading of 48.5. The July index is indicative of the concern that market participants have about the global economy and also the uncertainty that is being experienced in the regulatory and political environment. Further evidence of these financial and economic concerns are the strong demand that investors are showing for debt they consider safe. 

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