Economy

Equipment Finance Confidence Rises in November

Wondering if the time is right to purchase new equipment before the end of the year?

According to the Equipment Leasing & Finance Foundation’s Monthly Confidence Index, confidence in the equipment finance market rose to 60.2 from the October reading of 58.7.

“The most recent positive job creation report and the resolution of the leadership struggles in the House of Representatives should equate to more optimism and less uncertainty for small business owners and decision makers,” said David
T. Schaefer, CEO of Mintaka Financial. “I am more optimistic about the business environment.”

When asked to assess their business conditions over the next four months, 14.8% of executives responding said they believe business conditions will improve over the next four months, unchanged from October. Meanwhile, 11.1% believe
business conditions will worsen, which is an increase from 7.4% in October. Most executives believe conditions will remain the same (74.1%).

Most respondents are also rather unmoved when it comes to the demand for leases and loans to fund capital expenditures and access to capital to fund equipment acquisitions, with 66.7% believing demand will stay the same and that access
will also remain unchanged.

“Demand has stabilized and appears to be increasing as the traditional year-end push for last minute acquisitions occurs,”Executives also have middling thoughts about the economy, with 92.6% evaluating the current U.S. economy as “fair.”
In comparison, 3.7% rated it as “excellent, the same percentage that rated it as “poor.”

To read more about the economy click on the link below to read the entire article.

http://www.monitordaily.com/news-posts/equipment-finance-industry-confidence-rises-in-november/

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REF. – MonitorDaily November 20, 2015

 

U.S. Economy to Grow at 3.1% Pace in 2015

The U.S. economy is expected to maintain solid growth throughout 2015, with real GDP forecast to grow at a pace of 3.1%, a report issued by BMO Economics and run by CNN Money said. The positive growth prediction is a result of a variety of factors, namely lower oil prices, strong consumer spending, significant job growth, solid housing market momentum and significant business investment, according to the report.

“Consumer spending and housing look to lead economic growth this year, more than offsetting weakening net exports and ebbing business investment flows, particularly in the oil sector,” said Michael Gregory, head of U.S. Economics, BMO Capital Markets. “While wage trends continue to disappoint, for consumers and the economy as a whole, this is being more than offset by the sheer number of jobs being created.”

Ref. ABFJournal February 17, 2015

ELFA: Year-End New Business Volume Spikes 90%

The Equipment Leasing and Finance Association’s (ELFA) Monthly Leasing and Finance Index (MLFI-25), which reports economic activity from 25 companies representing a cross section of the $903 billion equipment finance sector, showed their overall new business volume for December was $12.9 billion, up 20% from new business volume in December 2013. In a typical end-of-year spike, their new business volume was up 90% from November volume of $6.8 billion. Cumulative new business volume for 2014 rose 8% over 2013.

Receivables over 30 days were unchanged from the previous month and from the same period in 2013 at 1%. Charge-offs were unchanged for the ninth consecutive month at an all-time low of 0.2%.

Credit approvals totaled 78.6% in December, a slight decrease from 79.1% the previous month. Total headcount for equipment finance companies was up 0.5% year over year.

ELFA president and CEO William G. Sutton, CAE, said: “Despite a very volatile Q4 equities market, the U.S. economy ended the year in a strong position, evidenced by lower unemployment, continued healing in the housing market, gas prices that seem to be declining almost daily, and robust consumer spending. Against this backdrop, C&I lending picked up as commercial businesses made significant investments in plant and equipment. Despite the typical end-of-year seasonal spike, December’s MLFI-25 statistics enter record territory: the 20% increase in year-over-year new business volume was one of the largest December increases in the history of the MLFI-25. Add to this healthy credit markets and the equipment finance industry appears poised for the breakout performance industry observers have been waiting for. We hope that this momentum will carry forward into 2015.”

To discuss a vendor equipment leasing program for your company, contact Lease Genie today at (877) 715-5105 or visit us at www.LeaseGenie.com to learn more.

Ref. MonitorDaily January 26,2015

October Class 8 truck sales up 9.7%

Class 8 truck sales jumped 9.7 percent in October as compared with September, according to data compiled by WardsAuto. Total October sales of 22,032 bested September sales of 20,078, marking it the third straight month sales have increased.

With two months to go, November and December sales will certainly push the 2014 total well past the 2013 total of 184,784, and the 2012 total sales of 194,715. Sales of 210,000-plus are certainly not beyond reach, given that December is always a high sales month.

That would mark 2014 as the best year for Class 8 sales since the pre-recession total of 284,008 in 2006.

Ref:  MonitorDaily Nov. 18, 2014

Big Bank Approval Rates Drop for Small Business Loans

Big Bank Approval Rates Drop for Small Business Loans – Ref: Monitor Daily

According to the October 2014 Biz2Credit Small Business Lending Index, small business loan approval rates at big banks dropped for the first time in seven months, a monthly analysis of 1,000 loan applications on Biz2Credit.com. Small business loan approval rates at banks with $10 billion+ in assets dipped to 20.4% in October from 20.6% in September.

“Big banks have demonstrated their commitment to small business owners over the last year. However, institutional lenders are moving into the marketplace and attracting high quality borrowers,” said Biz2Credit CEO Rohit Arora, who oversaw the research. “Despite the small drop in approval percentages, big bank financing of small businesses is up nearly 20% in comparison to last November when the economy was reeling from the government shutdown. With improving economic conditions, entrepreneurs have shown willingness to invest in their firms more this year than in any other since the Great Recession of 2009-11.”

The percentage of loans granted by small banks slipped for the fifth consecutive month to 50.2% from 50.3% last month. Yet they still continue to approve more than half of the loan requests they receive.

“Some smaller banks are paying the price for being slow to accept online applications,” Arora said. “The increased competition from big banks and institutional lenders are hurting them because borrowers are going to these competitors instead of small banks.”

Meanwhile, institutional lenders granted 59.7% of the funding requests they received in October, a slight increase from 59.5% in September. Approval rates by institutional lenders have increased every month since Biz2Credit began monitoring this category of lenders in January 2014.
“Small business lending is becoming mainstream among institutional players, who are offering more long-term products. They look to be a long-term threat for banks in the small business lending space,” Arora explained. “Big banks long had the advantage of a vast distribution network, the branches, which are now fading away. Also, immigrants are not as impressed by the brand names of big banks. That’s an advantage they long held.”

“People are seeking to do capital investments and are looking for money and shopping around. You can easily shop online and get longer terms,” explained Arora, one of the nation’s leading experts in small business lending.

Credit unions granted 43.5% of loan applications in October, a slight rise over the approval rate of 43.4% last month. However, a year-to-year comparison shows that lending approval rates at credit unions are down as they continue to be an afterthought by small business loan applicants.