ELFA: December New Business Volume Rises 66% M/M Despite 6% Y/Y Decline

According to the Equipment Leasing and Finance Association’s Monthly Leasing and Finance Index (MLFI-25), overall new business volume for December 2020 was $12.1 billion, which was down 6% year over year from December 2019. However, volume was up 66% on a month-over-month comparison with the $7.3 billion reported in November 2020, representing a typical year-end spike. Overall, cumulative new business volume for 2020 was down almost 6% compared with 2019.

Receivables over 30 days were 2.2%, down from 2.3% the previous month and unchanged from the same period in 2019. Charge-offs were 0.59%, down from 0.61% the previous month and up from 0.51% in the year-earlier period.

Credit approvals totaled 75.2%, up from 70.4% in November. Total headcount for equipment finance companies was down 4.6% on a year-over-year basis.

Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) in January is 59.6, unchanged from the December index.

“While 2020 certainly presented serious challenges to our nation’s economic well-being as well as to the physical well-being of many of our citizens, the equipment finance business, overall, showed remarkable resilience and durability,” Ralph Petta, president and CEO of the ELFA, said. “In early 2020, our industry seemed poised to continue 2019’s strong performance, as measured by a variety of key metrics. Then the pandemic hit. Our nation suffered a shock of unimaginable and historic proportions. The economy faltered, millions of Americans lost their jobs and a raging health pandemic threatened the very lives of so many. Now, looking in the rearview mirror, at the start of a new year that brings such hope and promise — with new stimulus initiatives coming out of Washington and distribution of a vaccine designed to protect our people — most equipment finance sector observers would consider a single-digit decline in year-over-year new business volume tolerable, if not acceptable. In fact, anecdotal reports from some ELFA member organizations indicate that 2020 was a record year. This speaks to the strength and resilience of our industry as it equips American businesses to succeed and prosper.”

“The new year provides a chance to reflect upon 2020’s unprecedented events and look forward to opportunities ahead,” Walter Rabin, CEO of Signature Financial, said. “While the health and safety of our colleagues and clients remained paramount as the pandemic surged, Signature Financial continued its growth trajectory, exceeding $5 billion in its portfolio at year end. As demonstrated by the MLFI-25 showing only a 6% decrease in year-over-year volume, the industry remained resilient in generating capital essential to sustain the U.S. economy amid the pandemic-affected economy. With rollout of the COVID-19 vaccine now accelerating and additional stimulus in the near-term, we anticipate 2021 offering new business growth opportunities and improved confidence.”

The ELFA’s Monthly Leasing and Finance Index (MLFI-25) reports economic activity from 25 companies representing a cross section of the $900 billion equipment finance sector.

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