Two years ago, economic woes sparked a 20-month decline in the equipment leasing and finance industry. However, over the past four months, the industry has been showing substantial growth and gains shown in July have been the strongest since the decline began.
"Our data mirrors recently reported government statistics showing the annual rate of overall business investment in equipment and software up nearly 22 percent in the second quarter, said William G. Sutton, president of the Equipment Leasing and Finance Association (ELFA). It appears we're heading in the right direction and our members remain cautiously optimistic that this trend will continue."
(Data compiled by ELFA)
In addition, July's approved financing applications rose to 70 percent, which is a 7 percent increase from July 2009. Of the loans granted, only 3.5 percent were past due by more than 30 days, which is an improvement of 10 percent from the previous year.
According to a survey by ELFA, respondents reported that collectively, they financed $5.6 billion worth of new equipment in July compared to $4.8 billion one year ago. The industry is also had steadily been showing growth month-to-month, though reported business gains from June to July only improved slightly.
Though increases in investment spending is usually indicative of recovering business conditions, only 22 percent of finance company and bank executive are confident that conditions will improve during the next four months.