May Equipment Leasing Up 16% from 2021, Down 10% from April 2022
June 28, 2022 - The Equipment Leasing and Finance Association’s (ELFA) Monthly Leasing and Finance Index (MLFI-25) showed overall new business for May was $9.4 billion, up 16% from new business in May 2021.
Volume was down 10% from $10.5 billion in April. Year-to-date, cumulative new business volume was up nearly 8% compared to 2021.
Receivables over 30 days were 1.6%, down from 2.1% the previous month, and down from 1.9% in the same period in 2021.
Charge-offs were 0.12%, up from 0.05% the previous month, and down from 0.30% a year earlier.
Credit approvals totaled 76.8%, down from 77.4% in April.Total headcount for equipment finance companies was down 3.0% year over year.
Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) in June is 50.9, an increase from 49.6 in May.
ELFA President and CEO Ralph Petta said, “May activity for MLFI-25 equipment finance company participants shows strong origination volume and very stable credit quality metrics. The economy continues to provide jobs and corporate America, in general, reports strong balance sheets—all in the face of a waning health pandemic. Offsetting this good news is high inflation, creating havoc for many consumers, and continued supply chain disruptions and higher interest rates, which are squeezing much of the business sector. As a result, many equipment finance providers approach the summer months with guarded optimism.”
Scott Dienes, Senior Vice President & Head of Equipment Finance and Leasing, Associated Bank, said, “The sustained rising interest rate environment coupled with pandemic overhang and extreme supply chain bottlenecks have pushed for a greater need in the equipment financing industry. With this in mind, the market has continued a year-over-year increase in new business volume which leads us to continue to be cautiously optimistic going forward with nearly half the year complete.”
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.