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 in the equipment finance industry for February was $7.9 billion, up 11% year over year from their new business volume in February 2022. In addition, while the companies’ February volume was down 10% from $8.8 billion in January, year-to-date cumulative new business volume was up nearly 9% compared to the same time period in 2022.
Receivables more than 30 days were 1.8%, down from 1.9% in January and up from 1.7% in the same period in 2022. Charge-offs were 0.32%, down from 0.34% the previous month and up from 0.09% in the year-earlier period. Credit approvals totaled 75.7%, up from 75.1% in January. Total headcount for the equipment finance companies was down 3.7% year over year in February.
Separately, according to the Equipment Leasing & Finance Foundation’s March 2023 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI), overall confidence in the equipment finance market is at a mark of 50.3, a decrease from the February index of 51.8.
“Monthly data for February shows a substantial rise in new business volume compared to the same period last year,” Ralph Petta, president and CEO of the ELFA, said. “The steady rise in short-term interest rates and stubborn inflationary pressures do not seem to have suppressed demand for productive equipment by U.S. businesses. A mild winter and steady return to a more normalized supply chain in a number of important sectors also contributed to the strong February data. Portfolios of MLFI respondents continue to perform well.”
“The February MLFI index and increase in year-over-year new business volume are reflective of our results in our core markets,” Marc Gingold, CLFP, vice president of syndication at Fleet Advantage, said. “In the transportation sector, we expect origination growth during 2023 as these supply-chain issues diminish and accelerating deliveries fulfill a healthy backlog. Alternative fuel vehicles are gaining some traction with extensive customer interest, but we foresee very limited volumes as there remains limited qualified long-haul applications. Overall, we remain optimistic but sensitive to credit quality as economic conditions are volatile.”
