ELFA: June New Business Volume Down 1% Y/Y, Up 10% M/M

According to the Equipment Leasing and Finance Association’s Monthly Leasing and Finance Index (MLFI-25), overall new business volume for June was $10.3 billion, down 1% year over year from June 2021 and up 10% from $9.4 billion in May. Year-to-date cumulative new business volume was up 6% through June compared with the same period in 2021.

Receivables more than 30 days were 1.5%, down from 1.6% in May and down from 1.8% in the same period in 2021. Charge-offs were 0.15%, up from 0.12% in May and down from 0.22% in the year-earlier period.

Credit approvals totaled 78.1%, up from 76.8% in May. In addition, total headcount for equipment finance companies was down 3.5% year over year in June.

Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) in July is 46.1, a decrease from 50.9 in June.

“Respondents to the June report indicate another strong month in originations and credit quality. Inflation continues to provide a headwind in an otherwise benign economy. The Fed has signaled its resolve to meet these inflationary pressures by steadily increasing short-term interest rates without throwing cold water on our post-pandemic economic recovery,” Ralph Petta, president and CEO of the ELFA, said. “Providers of equipment finance have risen to the occasion, enabling businesses, both large and small, to acquire the productive assets they need to grow their businesses to meet their customers’ needs.”

“Channel volume versus last month and last year significantly exceeds the MLFI-25, mainly driven by two new business units and product development,” Brad Peterson, CEO of Channel, said. “Like most, our portfolio is also outperforming expectations and historical levels in both delinquency and write-offs. We monitor performance data intensely to identify potential economic-driven deterioration by industry, geography and equipment type, among others. The primary business challenges we face today are the rapidly changing cost of funds, an uncertain economic environment and dramatic growth compounded by the complexity of finding new employees.”

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