ELFA: Equipment Finance New Business Volume Rises 19% Y/Y in April

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 $900 billion equipment finance sector, overall new business volume for April was $9.8 billion, up 19% year over year from new business volume in April 2020. Volume was up 5% month to month from $9.3 billion in March. Year-to-date cumulative new business volume was up 4% compared with 2020.

Receivables more than 30 days were 1.8% in April, down from 1.9% the previous month and down from 3% in the same period in 2020. Charge-offs were 0.3% in April, down from 0.43% the previous month and down from 0.8% in the same year-earlier period.

Credit approvals totaled 76.3% in April, down from 77% in March. Total headcount for equipment finance companies was down 15.4% year over year in April, a decrease due to significant downsizing at a MLFI reporting company.

Separately, according to the Equipment Leasing & Finance Foundation’s May 2021 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI), overall confidence in the equipment finance market is 72.1, easing from April’s all-time high of 76.1.

“Respondents showed robust April business activity, attesting to a strengthening economy,” Ralph Petta, president and CEO of the ELFA, said. “Despite soft labor market data for the month, an increasing number of businesses are opening up, as more Americans are receiving a vaccination, traveling and otherwise trying to return to some semblance of normalcy. Portfolio quality also shows resilience, as lease and loan contract modifications requested by many customers appear to be in the rearview mirror. The economy and business activity still have a ways to go to return to pre-pandemic levels, but what we see so far in terms of capital equipment investment is indeed encouraging as we head into the summer months.”

“2021 is trending to be a banner year for [Commercial Equipment Finance],” Ricardo Rios, president and CEO of Commercial Equipment Finance, said. “The April MLFI results and those at CEFI’s demonstrate major similarities, the only outlier being [year-over-year] headcount (where CEFI is 20% above). While we are actively seeking to hire additional team resources, the recruiting market is proving to be challenging.”

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