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, shows their overall new business volume for May was $9.4 billion, up 16% year-over-year from new business volume in May 2021. Volume was down 10% from $10.5 billion in May. Year-to-date, cumulative new business volume was up nearly 8% compared to 2021.
Receivables over 30 days were 1.6%, down from 2.1% the previous month and down from 1.9% in the same period in 2021. Charge-offs were 0.12%, up from 0.05% the previous month and down from 0.30% in the year-earlier period. Credit approvals totaled 76.8%, down from 77.4% percent in April. Total headcount for equipment finance companies was down 3.0% 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,” says ELFA President and CEO Ralph Petta in a press release from the organization. “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.”
Scott Dienes, senior vice president and head of equipment finance and leasing, Associated Bank, says, “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.”
Read the entire press release at: www.leasefoundation.org
