Companies originated $7.5 billion in leases, loans and lines of credit for equipment last month, a 21% increase compared with May 2012, according to ELFA. In addition, delinquency fell to its lowest level in six months. "American businesses are better able to meet their financial obligations, creating a favorable environment for additional capital investment and job creation," ELFA President and CEO William G. Sutton said. The Equipment Leasing & Finance Foundation's confidence index has reached 57.3 this month, up from 56.7 in May.
New regulations under development could affect CMBS. New risk retention requirements, particularly the proposed Premium Capture Cash Reserve Account (PCCRA) provision, will be watched with concern. "The PCCRA is probably our most immediate threat given the fact that we think that rule will come out this year. If that rule stays as proposed, it would have a devastating effect on our industry," says E.J. Burke, chairman-elect of the Mortgage Bankers Association.
Equipment-loan and -leasing activity increased 15.8% last month compared with July 2011, reaching $6.6 billion, according to an ELFA survey. Between January and July, financing rose 14.7%, to $43.8 billion. "Despite well-publicized fiscal challenges presented by the eurozone debt crisis, a recent uptick in global oil prices and a stubbornly sluggish U.S. economy, business financing of capital equipment continues to show some strength," ELFA President and CEO William G. Sutton said.
Companies are leasing and financing equipment at a steady clip, with new business volume increasing 29% last month compared with May, ELFA reported. The association said June was one of the best months for the industry since the recession. "Capital financing is really cheap right now; companies can borrow money and get a high rate of return," said Bill Choi, ELFA's vice president of research and industry services.
Mortgage Bankers Association CEO John Courson and MBA chairman-elect Michael Berman have sent a seven-page letter to the Federal Housing Finance Agency urging it to place Fannie Mae and Freddie Mac into receivership. They have been in conservatorship since 2008 -- one step before receivership, when the firms would be liquidated. "The current situation is not unlike a brain dead patient who is being kept alive indefinitely by artificial life support," they wrote.