Equipment Leasing and Finance Association’s Survey of Economic Activity: Monthly Leasing and Finance Index
May new business volume up 16 percent year-over-year, down 10 percent month-to-month, up nearly 8 percent year-to-date.
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 $900 billion equipment finance sector, showed their overall new business volume for May was $9.4 billion, up 16 percent year-over-year from new business volume in May 2021. Volume was down 10 percent from $10.5 billion in May. Year-to-date, cumulative new business volume was up nearly 8 percent compared to 2021.
Receivables over 30 days were 1.6 percent, down from 2.1 percent the previous month and down from 1.9 percent in the same period in 2021. Charge-offs were 0.12 percent, up from 0.05 percent the previous month and down from 0.30 percent in the year-earlier period.
Credit approvals totaled 76.8 percent, down from 77.4 percent in April. Total headcount for equipment finance companies was down 3.0 percent year-over-year.
Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) in June is 50.9, an increase from 49.6 in May.
“May activity for MLFI-25 equipment finance company participants shows strong origination volume and very stable credit quality metrics. The economy continues to provide jobs and corporate America, in general, reports strong balance sheets—all in the face of a waning health pandemic.
Offsetting this good news is high inflation, creating havoc for many consumers, and continued supply chain disruptions and higher interest rates, which are squeezing much of the business sector. As a result, many equipment finance providers approach the summer months with guarded optimism.” -- Ralph Petta, ELFA President and CEO
“The sustained rising interest rate environment coupled with pandemic overhang and extreme supply chain bottlenecks have pushed for a greater need in the equipment financing industry. With this in mind, the market has continued a year-over-year increase in new business volume which leads us to continue to be cautiously optimistic going forward with nearly half the year complete.” -- Scott Dienes, senior vice president & head of equipment finance and leasing, Associated Bank
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