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Equipment Leasing and Finance Association’s Survey of Economic Activity: Monthly Leasing and Finance Index

October new business volume up 16 percent Year-over-year, 16 percent month-to-month, and 10 percent Year-to-date

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 October was $10.7 billion, up 16 percent year-over-year from new business volume in October 2020. Volume was up 16 percent month-to-month from $9.2 billion in September. Year-to-date, cumulative new business volume was up 10 percent compared to 2020.

Receivables over 30 days were 1.7 percent, up from 1.6 percent the previous month and down from 2.2 percent in the same period in 2020. Charge-offs were 0.16 percent, down from 0.35 percent the previous month and down from 0.60 percent in the year-earlier period.

Credit approvals totaled 78.0 percent, up from 76.3 percent in September. Total headcount for equipment finance companies was down 11.0 percent 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 November is 64.6, an increase from the October index of 61.1.

ELFA President and CEO Ralph Petta said, “The equipment finance industry heads into the final quarter of the year in fine shape, judging from October MLFI data. The new business volume shows double-digit growth, a somewhat surprising development given anecdotal evidence by some ELFA members of supply chain disruptions negatively impacting the availability and cost of capital goods in certain market sectors. Fourth-quarter economic growth is projected to be buoyant despite higher prices and labor imbalances in the economy. And, with the recent signing of major infrastructure legislation coming out of Washington, the future for capital investment looks bright, indeed.”

William C. Perry III, President, Regions Equipment Finance Corporation, said, “Given the unprecedented times of supply chain disruption, excess liquidity, and rising inflation, there is still much to be hopeful about within the equipment finance sector. ‘The Great Transition’ will allow us all as providers of capital to further educate and provide value to our clients as they look to surmount challenges never before faced. In doing such, this should challenge the equipment finance sector to rethink our approach and how we serve our mission critical $1 trillion sectors. Trends reported in the October MLFI are largely encouraging and those that are not provide ‘opportunity’ to serve. Looking into 2022, we see significant potential for growth as pent-up demand begins to wane and our clients further assimilate to the current environment.”