ELFA: May New Business Volume Down 26% Y/Y, 18% M/M, Up 2% YTD

According to the Equipment Leasing and Finance Association’s Monthly Leasing and Finance Index, overall new business volume for May was $6.7 billion, down 26% year-over-year from new business volume in May 2019. Volume was down 18% month-to-month from $8.2 billion in April. Year-to-date, cumulative new business volume was up 2% compared with 2019.

Receivables over 30 days were 4.3%, up from 3% the previous month and up from 1.7% for the same period in 2019. Charge-offs were 0.6%, down from 0.8% the previous month and up from 0.46% in the year-earlier period. Credit approvals totaled 68.1%, down from 71.7% in April. Total headcount for equipment finance companies was down 2.2% year-over-year.

As previously reported, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) rose to 45.8 in June, up from 25.8 in May.

“The downturn in the economy precipitated by the COVID-19 pandemic crisis is responsible for new business softening in the equipment finance space during the month of May,” Ralph Petta, president and CEO of the ELFA, said. “This is evident in market segments serving customers in the construction, hotel, tourism, leisure and food service industries, in particular. Of note is separate Equipment Leasing & Finance Foundation survey data that show a willingness on the part of ELFA members to provide much-needed assistance to their customers by agreeing to restructure payment streams and extend deferral relief. This is a testament to an industry that time and again demonstrates flexibility and resolve by adapting in a positive way to sometimes disruptive and changing economic conditions.”

“The U.S. equipment finance market continues to see challenges with lower growth and delayed receivables due to the COVID-19 pandemic,” Aylin Cankardes, president of Rockwell Financial Group, said. “Businesses have put a portion of their capital acquisitions on hold while realigning resources for their customers and employees. We are starting to see a gradual boost from the fiscal and monetary stimulus efforts but it continues to be uneven across industry sectors. On a bright note, our customers are getting a better grip on the disruption by balancing between resiliency and efficiency. As states continue to reopen it should help stabilize activity in the coming months.”

The ELFA’s Monthly Leasing and Finance Index reflects capex or the volume of commercial equipment financed in the U.S. The index is a time series that reflects two years of business activity for the 25 companies currently participating in the survey.

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