ELFA Index says February New Business Volume Up 15% Year-Over-Year,

March 25, 2020 - 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 February was $6.8 billion, up 15% year-over-year from new business volume in February 2019. Volume was down 26% month-to-month from $9.2 billion in January. Year-to-date, cumulative new business volume was up 22% compared to 2019.

Receivables over 30 days were 2%, unchanged from the previous month and up from 1.80% the same period in 2019. Charge-offs were 0.51%, up from 0.47% the previous month, and up from 0.35% in the year-earlier period.

Credit approvals totaled 74.7%, down from 76.3% in January. Total headcount for equipment finance companies was down 3.1% year-over-year.

Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) in March is 46.0, a decrease from the February index of 58.7.

ELFA President and CEO Ralph Petta said, “The robust volume data captured in the February MLFI-25 will no doubt take a turn in succeeding months as the coronavirus pandemic puts a damper on business growth and expansion and equipment acquisition plans. In addition, portfolio quality—rising delinquencies and write-offs—will suffer as economic activity slows resulting in some lessees/obligors experiencing challenges meeting their payment obligations. The association is closely monitoring these marketplace developments, gauging the effect of changes in overall economic activity in the U.S. and, specifically, the impact to the equipment leasing and finance industry.”

The MLFI-25 is the only 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. EST 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 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/Data/MLFI/.