According to the Equipment Leasing and Finance Association’s 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, overall new business volume in the industry for April was $9.7 billion, down 8% year over year from new business volume in April 2022. Volume was also down 7% from $10.4 billion in March, but year-to-date, cumulative new business volume was up 0.7% compared to 2022.
Receivables more than 30 days in April were 1.8%, down from 1.9% in March and down from 2.1% in the same period in 2022. Charge-offs were 0.33%, up from 0.32% in March and up from 0.05 % in the year-earlier period. Credit approvals totaled 77.3%, up from 75.3% in March. Total headcount for equipment finance companies was down 1.8% year over year in April.
Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) in May is 40.6, a decrease from the April index of 47.0.
“April data revealed some softness in new business volume reported by MLFI respondents. It is not clear whether increased borrowing rates are constraining liquidity or if this decrease in originations is merely a blip in an otherwise healthy marketplace,” Ralph Petta, CEO and president of the ELFA, said. “Separately, a foundation survey indicates that a growing segment of business heads is somewhat pessimistic about the short-term outlook for the economy, in general and the equipment finance industry, specifically. We will be monitoring these and other economic data closely to provide useful insights to ELFA members as they navigate a choppy economy.”
“We all continue to navigate the ebbs and flows of a challenging economy. While that impact has been felt across all industries with unique circumstances, collectively, equipment finance appears to be well positioned,” Jeffrey LaLima, president of Financial Partners Group, said. “Companies and consumers remain resilient and are more mindful of the role financing plays as part of strategic long-term capital decisions. We’re coming from a period where access to capital was high and the cost was the lowest we’ve seen in decades. Now we’re seeing more thoughtful conversations and informed decisions, heightening the importance of relationships and experienced people to help navigate it all.”
