Equipment Leasing and Finance Association’s survey of economic activity monthly leasing and finance index
August new business volume up 14 percent year-over-year, 2 percent month-to-month and 2.8 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 $1 trillion equipment finance sector, showed their overall new business volume for August was $10.1 billion, up 14 percent year-over-year from new business volume in August 2022. Volume was up 2 percent from $9.9 billion in July. Year-to-date, cumulative new business volume was up 2.8 percent compared to 2022.
Receivables more than 30 days were 2.3 percent, unchanged from the previous month and up from 1.5 percent in the same period in 2022. Charge-offs were 0.34 percent, up from 0.32 percent the previous month and up from 0.17 percent in the year-earlier period.
Credit approvals totaled 75.1 percent, down from 75.3 percent in July. Total headcount for equipment finance companies was down 2.3 percent year-over-year.
Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) in September is 50.3, steady with the August index of 50.4.
“At its recent meeting, the Fed signaled to keep interest rates artificially elevated for the time being, hoping to continue its campaign to control inflation. Despite this higher interest rate environment, many businesses continue to invest in productive assets. As they do, equipment finance companies are providing the necessary capital to help these businesses thrive and prosper,” says Ralph Petta , ELFA president and CEO.
“The August MLFI survey results are encouraging given recent economic turbulence caused by high interest rates and inflationary pressures. Growth in new business volume is improving across all industries, especially for technology assets, clean energy assets, and projects in transportation and construction. As an independent lender, we are also experiencing an increase in activity as companies are looking for flexible financing alternatives amid credit tightening. Companies will always need access to capital to support and sustain growth, and we expect demand for financing new equipment to continue to strengthen as the economic environment improves,” says Craig Weinewuth, president and CEO, Mitsubishi HC Capital America, Inc.
About ELFA’s MLFI-25The MLFI-25 is the only near-real-time index that reflects capex, or the volume of commercial equipment financed in the U.S. The MLFI-25 is released globally at 8 a.m. Eastern time from Washington, D.C., each month on the day before the U.S. Department of Commerce releases the durable goods report. The MLFI-25 is a financial indicator that complements the durable goods report and other economic indexes, including the Institute for Supply Management Index, which reports economic activity in the manufacturing sector. Together with the MLFI-25 these reports provide a complete view of the status of productive assets in the U.S. economy: equipment produced, acquired and financed.
The MLFI-25 is a time series that reflects two years of business activity for the 25 companies currently participating in the survey. The latest MLFI-25, including methodology and participants, is available at www.elfaonline.org/knowledge-hub/mlfi-25-monthly-leasing-and-finance-index.
The MLFI-25 is part of the Knowledge Hub, the source for business intelligence in the equipment finance industry. Visit the hub at www.elfaonline.org/KnowledgeHub.
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