According to the Equipment Leasing and Finance Association’s Monthly Leasing and Finance Index (MLFI-25), overall new business volume for December 2021 was $11.8 billion, down 3% year over year from new business volume in December 2020. However, new business volume was up 49% month over month from $7.9 billion in November 2021 in a typical end-of-year spike. In addition, cumulative new business volume for 2021 was up almost 9% compared with 2020.

Receivables more than 30 days were 2%, down from 2.2% the previous month and down from 2.2% in the same period in 2020. Charge-offs were 0.25%, up from 0.2% the previous month and down from 0.59% in the year-earlier period.

Credit approvals totaled 78.6%, up from 77.2% in November. Total headcount for equipment finance companies was down 7.9% year over year, a decrease due to what the ELFA called significant downsizing at a MLFI reporting company.

Separately, according to the Equipment Leasing & Finance Foundation’s January 2022 Monthly Confidence Index for the Equipment Finance Industry, overall confidence in the equipment finance market is 63.9, unchanged from the December 2021 index.

“The association’s Q4 MLFI-25 equipment finance industry metrics show responding organizations reporting robust growth in new business activity as well as healthy portfolios, indicative of another solid year,” Ralph Petta, president and CEO of the ELFA, said. “Cumulative 2021 originations grew about 9% when compared to 2020, the first year impacted by the COVID-19 pandemic. Businesses in many industry sectors grew and expanded during the past 12 months, reflecting a favorable low interest rate environment, healthy corporate earnings and strong balance sheets. The outlook for the industry, and indeed overall economy, is somewhat cloudy, with unabated inflation, the Fed poised to increase interest rates, equities markets in a recent tailspin and the omicron variant remaining a concerning health factor in the U.S.”

“Supply constraints, strong economic growth and the early innings of the American Jobs Plan augur well for the equipment finance sector in 2022,” Kalyan Makam, executive vice president of Amur Equipment Finance, said. “That said, rising omicron cases have prolonged the price inflation and supply chain troubles across the country. As well, the jump in medium-term rates over the last few weeks may challenge margins for lenders.”

The ELFA is hosting a free one-hour webinar to discuss the 2021 MFLI survey findings today at 1 p.m. EST. To register to attend live or listen on-demand, visit elfaonline.org/webinars.