ELFA: New Business Volume in Equipment Finance Industry Rises in March

According to the Equipment Leasing and Finance Association’s Monthly Leasing and Finance Index (MLFI-25), overall new business volume for March was $9.3 billion, up 4% year over year from new business volume in March 2020. Volume was up 26% month to month from $7.4 billion in February. Year-to-date cumulative new business volume was down 1% compared with 2020.

Receivables more than 30 days were 1.9%, down from 2.1% the previous month and down from 2.6% in the same period in 2020. Charge-offs were 0.43%, down from 0.55% the previous month and down from 0.55% in the year-earlier period.

Credit approvals totaled 77%, up from 75.8% in February. Total headcount for equipment finance companies was down 15.2% 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 April is at an all-time high of 76.1, up from the March index of 67.7.

“The equipment finance industry appears poised to take advantage of an economic tailwind that is manifesting itself in an improving labor market, a continued low interest-rate environment, a strong corporate earnings season and high business confidence that is creating demand for investment in commercial equipment,” Ralph Petta, president and CEO of the ELFA, said. “ELFA member organizations also report improving portfolio quality, which is reflective of their customers’ ability to meet their payment obligations as the pandemic’s grip on many businesses loosens.”

“Thus far in 2021, as we continue to work our way through the pandemic, market demand has remained high, both on applications and credit approvals. Our existing portfolios continue to remain stable, with few leases stretching payables along while the underlying financials remain strong.,” Marci Slagle, president of BankFinancial Equipment Finance, said. “Approval to funding continues to lag a bit as the supply chain stretches, especially when there are multiple and/or foreign vendors involved. Overall, continuing into second quarter, there seems to be continued growth and strength across all of our markets, which encompass small, middle, corporate and governmental.”

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