ELFA: Economic Activity Is Mixed For Equipment Finance Sector

Sept. 30, 2022
New business volume is up year-to-year, down month-to-month.

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 August was $8.8 billion, up 4% year-over-year from new business volume in August 2021. Volume was down 13% from $10.1 billion in July. Year-to-date, cumulative new business volume was up 5% percent compared to 2021.

Receivables over 30 days were 1.5%, down from 1.6% the previous month and down from 1.8% in the same period in 2021. Charge-offs were 0.17%, down from 0.18% the previous month and down from 0.23% in the year-earlier period.

Credit approvals totaled 75.2%, down from 78% in July. Total headcount for equipment finance companies was down 2.9% year-over-year. Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) in September is 48.7, a decrease from 50 in August.

“August origination volume reflects an equipment finance industry that is fueling continued growth and expansion of businesses throughout the U.S. Up to this point at least, steadily rising interest rates do not appear to dampen enthusiasm of businesses that prefer the utilization of productive assets versus their ownership, which is the essence of the equipment finance sector,” says ELFA President and CEO Ralph Petta in a press release from the organization. “With the Fed’s most recent 75-basis point jump in short-term interest rates, and the prospect of a hard landing, time will tell whether—and to what extent—these same business owners continue to grow and invest in equipment.”

Read the entire press release at: www.elfaonline.org

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