ELFA MLFI-25: NBV Down 7% Y/Y, 8% M/M, Up 10% YTD

The Equipment Leasing and Finance Association’s (ELFA) Monthly Leasing and Finance Index (MLFI-25) showed their overall new business volume for April was $8.2 billion, down 7% year-over-year from new business volume in April 2019. Volume was down 8% month-to-month from $8.9 billion in March. Year-to-date, cumulative new business volume was up 10% compared to 2019.

Receivables over 30 days were 3.00%, up from 2.60% the previous month and up from 1.50% the same period in 2019. Charge-offs were 0.80%, up from 0.55% the previous month, and up from 0.32% in the year-earlier period.

Credit approvals totaled 71.7%, down from 74.2% in March. Total headcount for equipment finance companies was down 4.8% year-over-year.

Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) in May increased to 25.8, up from the all-time low of 22.3 in April.

ELFA President and CEO Ralph Petta said, “Business performance shows deterioration from the effects of the coronavirus pandemic, with volume levels and portfolio quality metrics both falling in tandem. The expectation is that this pattern continues into the summer months as the nation’s economy dips into a recession. Time will only tell whether these conditions stabilize in the face of massive fiscal stimulus provided by the federal government.”

Thomas Rutherford, Division President, Crestmark Equipment Finance, said, “Not surprisingly, the April numbers reflect a continued softening of new business activity as well as an uptick in payment delinquency and charge-offs for our industry — and the U.S. economy as a whole. We are heading into an unprecedented economic environment impacting businesses of all types and sizes, and we can anticipate that trend will continue through much of 2020. As we move into the next phase as states reopen, it is critical that we be purposeful and flexible as we work with clients with an eye toward new learnings. We are a resilient industry, and will find unique ways to adapt to this new environment to best support our clients, our shareholders and our employees — whether it be internally through increased efficiencies as we go virtual, or recognizing and embracing emerging trends that might provide

The MLFI-25 measures monthly commercial equipment lease and loan activity as reported by participating ELFA member equipment finance companies representing a cross section of the equipment finance sector, including small ticket, middle-market, large ticket, bank, captive and independent leasing and finance companies. Based on hard survey data, the responses mirror the economic activity of the broader equipment finance sector and current business conditions nationally.

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