ELFA: Energy Prices, Inflation Confront Industry

May 27, 2022
Equipment Leasing and Finance Association reports on April economic activity.

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 April was $10.5 billion, up 7% year-over-year from new business volume in April 2021. Volume was relatively unchanged from $10.6 billion in March. Year-to-date, cumulative new business volume was up nearly 6% compared to 2021. 

Receivables over 30 days were 2.1%, up from 1.5% the previous month and up from 1.8% in the same period in 2021. Charge-offs were 0.05%, down from 0.10% the previous month and down from 0.30% in the year-earlier period. Credit approvals totaled 77.4%, down from 78.3% in March. Total headcount for equipment finance companies was down 1.0% year-over-year. Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) in May is 49.6, a decrease from 56.1 in April.

“New business volume for a subset of the ELFA membership shows stable growth in April amidst a somewhat slowing economy and rising interest rate environment. Anecdotal information from a number of ELFA member organizations indicates that equipment deliveries continue to be a problem as supply chain disruptions continue,” says ELFA President and CEO Ralph Petta in a press release from the organization. “Soaring energy prices and inflation are headwinds confronting the industry as we move into the summer months.”

Eric Bunnell, CLFP, president, Arvest Equipment Finance, says, “The recent results from the MLFI-25 mirror what we are seeing every day. Volume continues to be steady even with rising interest rates. The portfolio is performing well, with below average delinquency rates, but we continue to monitor this closely. We continue to be optimistic for the rest of 2022, especially if the supply chain continues to improve.”

Read the press release at www.elfaonline.org

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