Equipment leasing index: volume for September up from August

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 $1 trillion equipment finance sector, showed their overall new business volume for September was $10.2 billion, up 11 percent year-over-year from new business volume in September 2021, and up 16 percent from $8.8 billion in August.

Year-to-date, cumulative new business volume was up nearly 6 percent compared to 2021.

Receivables over 30 days were 1.5 percent, unchanged from the previous month and down from 1.6 percent in the same period in 2021. Charge-offs were 0.17 percent, unchanged from the previous month and down from 0.35 percent in the year-earlier period.
Credit approvals totaled 77.3 percent, up from 75.2 percent in August. Total headcount for equipment finance companies was down 2.4 percent year-over-year.

Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) in October is 45, a decrease from the September index of 48.7.

ELFA President and CEO Ralph Petta said, “Third quarter new business volume in the over-$1 trillion equipment finance industry is exceptionally strong, providing fresh evidence that the economic contraction projected by many economists has not yet arrived. Another data point supporting this relatively benign economic scenario is extremely low delinquencies, indicating that end users of commercial equipment continue to make on-time payments to their finance providers.”

Hollis Bufferd, CEO, Star Hill Financial LLC, said, “Despite continued challenges in the supply chain, inflationary pressures and rising interest rates, the industry and our finance company continue to grow. Like our peers, we have continued expectations for the balance of 2022, as end-users plan for year-end capital acquisitions. Charge-offs and delinquencies remain at historic lows. The probability of continued Fed interest rate increases on the horizon creates some uncertainty, but we are seeing increased demand for fixed rate leases and loans to support our clients’ capital expenditures. With an eye on global economic disruptions, I am cautiously optimistic.”

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.