Washington, DC (Aug. 23, 2022) — 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 July was $10.1 billion, up 2 percent year-over-year from new business volume in July 2021. Volume was down 2 percent from $10.3 billion in June. Year-to-date, cumulative new business volume was up 5 percent compared to 2021.
Receivables over 30 days were 1.6 percent, up from 1.5 percent the previous month and down from 1.9 percent in the same period in 2021. Charge-offs were 0.18 percent, up from 0.15 percent the previous month and unchanged from the year-earlier period.
Credit approvals totaled 78.0 percent, down from 78.1 percent in June. Total headcount for equipment finance companies was down 2.8 percent year-over-year.
Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) in August is 50, an increase from 46.1 in July.
ELFA President and CEO Ralph Petta said, “Industry performance continues to show solid growth. Despite higher interest rates, continued supply chain disruptions, and higher inflation, the equipment finance industry continues to deliver value to businesses who rely on it to acquire necessary capital equipment to run their operations. Equipment finance providers leverage a positive credit environment and abundant liquidity to help these businesses grow and prosper.”
Michael Romanowski, president, Farm Credit Leasing, said, “We continue to see robust interest from agribusinesses and producers as they look to expand operations and lock in low long-term rates. Demand is outstripping supply as we continue to experience equipment delivery delays due to continued supply chain challenges. Solar leasing remains attractive, and we expect continued interest with the passing of the Inflation Reduction Act.”
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 here.
The MLFI-25 is part of the Knowledge Hub, the equipment finance industry’s business intelligence source.
ELFA produces the MLFI-25 survey to help member organizations achieve competitive advantage by providing them with leading-edge research and benchmarking information to support strategic business decision-making.
The MLFI-25 is a barometer of the trends in U.S. capital equipment investment. Five components are included in the survey: new business volume (originations), aging of receivables, charge-offs, credit approval ratios, (approved vs. submitted) and headcount for the equipment finance business.
The MLFI-25 measures monthly commercial equipment lease and loan activity as reported by participating ELFA member equipment finance companies representing a cross-section of the equipment finance sector, including small ticket, middle-market, large ticket, bank, captive and independent leasing and finance companies. Based on hard survey data, the responses mirror the economic activity of the broader equipment finance sector and current business conditions nationally.
The Equipment Leasing and Finance Association (ELFA) is the trade association that represents companies in the nearly $1 trillion equipment finance sector, which includes financial services companies and manufacturers engaged in financing capital goods. ELFA members are the driving force behind the growth in the commercial equipment finance market and contribute to capital formation in the U.S. and abroad. Its 580 members include independent and captive leasing and finance companies, banks, financial services corporations, broker/packagers and investment banks, as well as manufacturers and service providers. In 2021, ELFA is celebrating 60 years of equipping business for success.