June Equipment Leasing and Finance Volume Up 17% from 2020, Up 28% from May

August 3, 2021—In June, equipment leasing and finance activity was up 17% year over year, and up 28% over May’s volume, according to the Equipment Leasing and Finance Association’s (ELFA) Monthly Leasing and Finance Index for June. The report was released July 26th.

The index reports economic activity from 25 companies representing a cross section of the $900 billion equipment finance sector.

The report shows overall new business volume for June was $10.4 billion, up 17% compared to June of 2020. Volume was up 28% from the $8.1 billion reported for May. Year-to-date, cumulative new business volume was up nearly 9% compared to 2020.

Receivables over 30 days were 1.8%, down from 1.9% the previous month and down from 2.6% in the same period in 2020. Charge-offs were 0.22%, down from 0.30% the previous month and down from 0.71% in the same period last year.

Credit approvals totaled 76.7%, down from 77.4% in May. Total headcount for equipment finance companies was down 13.8% 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 July is 72.9, an increase from the June index of 71.3.

ELFA President and CEO Ralph Petta said, “If equipment finance new business volume at the end of Q2 is any indication, the second half of the year should be as strong as economists predict. Despite slower-than-desired vaccinations in certain parts of the U.S, consumer spending is accelerating, markets remain strong and unemployment continues to slowly abate, all of which are contributing to a strong economy. This portends well for the equipment finance sector as we move into the second half of 2021. Recent pronouncements from the Fed indicate that they are eyeing recent upticks in inflation warily, but interest rates should remain low—at least in the near- to medium-term.”

Mark Duncan, EVP and COO, Hitachi Capital America, said, “2021 continues to bring economic tailwinds as demand continues to outpace supply. The June MLFI illustrates similar conditions at Hitachi Capital America. Our transportation and commercial finance portfolios continue to perform well, with expectations to exceed FY 20-21. Future disruptions could be attributed to supply chain and labor issues, which may take additional time to resolve.”