April New Business Volume Up 7 Percent Year-over-year,
Relatively Unchanged Month-to-month, Up Nearly 6 Percent Year-to-date
Washington, DC, May 24, 2022—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, showed their overall new business volume for April was $10.5 billion, up 7 percent 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 percent compared to 2021.
Receivables over 30 days were 2.1 percent, up from 1.5 percent the previous month and up from 1.8 percent in the same period in 2021. Charge-offs were 0.05 percent, down from 0.10 percent the previous month and down from 0.30 percent in the year-earlier period.
Credit approvals totaled 77.4 percent, down from 78.3 percent in March. Total headcount for equipment finance companies was down 1.0 percent 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.
ELFA President and CEO Ralph Petta said, “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. Soaring energy prices and inflation are headwinds confronting the industry as we move into the summer months.”
Eric Bunnell, CLFP, President, Arvest Equipment Finance, said, “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.”
About ELFA’s MLFI-25
The 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.
ELFA produces the MLFI-25 survey to help member organizations achieve competitive advantage by providing them with leading-edge research and benchmarking information to support strategic business decision making.
The MLFI-25 is a barometer of the trends in U.S. capital equipment investment. Five components are included in the survey: new business volume (originations), aging of receivables, charge-offs, credit approval ratios, (approved vs. submitted) and headcount for the equipment finance business.
The MLFI-25 measures monthly commercial equipment lease and loan activity as reported by participating ELFA member equipment finance companies representing a cross section of the equipment finance sector, including small ticket, middle-market, large ticket, bank, captive and independent leasing and finance companies. Based on hard survey data, the responses mirror the economic activity of the broader equipment finance sector and current business conditions nationally.
The Equipment Leasing and Finance Association (ELFA) is the trade association that represents companies in the nearly $1 trillion equipment finance sector, which includes financial services companies and manufacturers engaged in financing capital goods. ELFA members are the driving force behind the growth in the commercial equipment finance market and contribute to capital formation in the U.S. and abroad. Its 580 members include independent and captive leasing and finance companies, banks, financial services corporations, broker/packagers and investment banks, as well as manufacturers and service providers. ELFA has been equipping business for success for more than 60 years. For more information, please visit www.elfaonline.org.
ELFA is the premier source for statistics and analyses concerning the equipment finance sector. Please visit www.elfaonline.org/knowledge-hub/knowledge-hub-home for additional information.
The Equipment Leasing & Finance Foundation is a 501c3 non-profit organization that propels the equipment finance sector—and its people—forward through industry-specific knowledge, intelligence, and programs that contribute to industry innovation, individual careers, and the overall betterment of the equipment leasing and finance industry. The Foundation is funded through charitable individual and corporate donations. Learn more at www.leasefoundation.org.