Supply Disruptions Continue To Vex Equipment Finance Industry

March 29, 2022
Equipment Leasing and Finance Association releases survey of 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 February was $7.1 billion, down 4% year-over-year from new business volume in February 2021. Volume was down 14% month-to-month from $8.3 billion in January. Year-to-date, cumulative new business volume was down nearly 1% compared to 2021.

Receivables over 30 days were 1.7%, down from 1.8% the previous month and down from 2.1% in the same period in 2021. Charge-offs were 0.09%, down from 0.17% the previous month and down from 0.55% in the year-earlier period.

Credit approvals totaled 78.2%, down from 78.4% in January. Total headcount for equipment finance companies was down 12.2% year-over-year, a decrease due to significant downsizing at an MLFI reporting company.Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) in March is 58.2, a decrease from 61.8 in February.

“New business volume at MLFI 25 companies has grown modestly in 2022, as it typically does in the early months. What is eye-catching, however, is the extremely high credit quality reported by respondents,” says ELFA President and CEO Ralph Petta. “Geopolitical unrest, increasing interest rates, inflation and continuing supply disruptions all pose headwinds that bear monitoring.  But equipment finance companies always find ways to stay relevant, resilient and reliable in helping American businesses acquire the assets they need to thrive.”

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