ELFA: Equipment Finance New Business Volume Rises 9% Y/Y in July

According to the Equipment Leasing and Finance Association’s Monthly Leasing and Finance Index (MLFI-25), overall new business volume for July was $9.9 billion, which was up 9% year over year from new business volume in July 2020. Meanwhile, volume was down 5% month to month from $10.4 billion in June and year-to-date cumulative new business volume was up nearly 9% compared with 2020.

Receivables more than 30 days were 1.9% in July, up from 1.8% in June and down from 2.4% in the same period in 2020. Charge-offs were 0.18%, down from 0.22% in June and down from 0.73% in July 2020.

Credit approvals totaled 76.5% in July, down from 76.7% in June. Total headcount for equipment finance companies was down 13.9% year over year, a decrease due to significant downsizing at an MLFI reporting company.

Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) in August is 66.6, a decrease from the July index of 72.9.

“Despite supply chain disruptions in some sectors of the economy, signs of inflation and emergence of the Delta coronavirus, July new business volume in the equipment finance industry is strong,” Ralph Petta, president and CEO of the ELFA, said. “Consumer spending is picking up, equity markets continue to advance and unemployment is slowing — reasons to be optimistic about equipment investment and industry performance for the second half of the year.”

2021 continues to be interesting,” Jill McKean-Bilby, president of BOK Financial Equipment Finance, said. “Demand for equipment remains high, which is resulting in higher equipment costs. Customers are ordering equipment from OEMs with very long lead times, with the delivery times of some orders unknown. The interest rate environment still remains low. Cash has been one of our main competitors this year due to companies still having additional resources due to PPP loans. However, we have been able to continue to grow and remain steady with organic growth.”

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