Equipment Leasing and Finance Index: September New Business Up 24% from August, Down 13% Year-to-Year
Oct. 27, 2020 - The Equipment Leasing and Finance Association’s Monthly Leasing and Finance Index showed that overall new business volume in September was $8.7 billion. That's up 24% month-to-month from $7 billion in August, but down 13% year-over-year from September 2019. Year-to-date, cumulative new business volume was down 5% compared to 2019.
Receivables over 30 days were 2.00%, down from 2.40% the previous month and up from 1.70% for the same period in 2019.
Charge-offs were 0.82%, up from 0.75% the previous month and up from 0.40% a year earlier.
Credit approvals totaled 72.9%, up from 71.0% in August.
Total headcount for equipment finance companies was down 2.7% year-over-year.
Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index in October is 55.0, down from the 56.5 in September.
ELFA President and CEO Ralph Petta said, “Despite the drop in September year-over-year new business, a look at the data beginning with the advent of the pandemic in February shows that the industry, in general, is holding its own. In fact, anecdotal evidence from some ELFA member companies indicates they are enjoying a very strong year. Tempering this positive data point, however, is a spike in losses—not surprising, given that the losses, in all likelihood, reflect customers in distressed industry sectors significantly impacted by the economic downturn resulting from the COVID pandemic.”
“The pandemic continues to have a negative impact on the overall economy, and this data demonstrates that our industry is not immune. However, the 24% growth in month-to-month volume in the September 2020 MLFI-25 is promising,” said Anthony Sasso, Head of TD Equipment Finance. “Within any disruption, there is opportunity. Here at TDEF, we have seen our customers find innovative ways to continue to grow, and we ourselves have been able to increase our portfolio. The low interest rate environment, combined with rising spot rates within trucking, presents a good opportunity for those companies who are in a position to expand.”
About ELFA’s MLFI-25
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. 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/Data/MLFI/.