ELFA: New Business Volume Rises 8% Y/Y But Falls 26% M/M in November

According to the Equipment Leasing and Finance Association’s Monthly Leasing and Finance Index (MLFI-25), overall new business volume for November was $7.9 billion, up 8% year over year from new business volume in November 2020. However, volume was down 26% from $10.7 billion in October. Year-to-date cumulative new business volume through November was up 10% compared with the same period in 2020.

Receivables more than 30 days were 2.2% in November, up from 1.7% the previous month and down from 2.3% in the same period in 2020. Charge-offs were 0.2% in November, up from 0.16% the previous month and down from 0.61% in November 2020.

Credit approvals totaled 77.2% in November, down from 78% in October. In addition, total headcount for equipment finance companies in the month was down 9.9% year over year, which, according to the ELFA, was due to downsizing at an MLFI-25 reporting company.

Separately, according to the Equipment Leasing & Finance Foundation’s December 2021 Monthly Confidence Index for the Equipment Finance Industry, overall confidence in the equipment finance market is 63.9, a decrease from the November index of 64.6.

“As we get ready to close out 2021, industry volume is still holding up, with portfolio quality improved relative to the same period last year,” Ralph Petta, president and CEO of the ELFA, said. “Supply chain disruptions continue to plague an otherwise strong economy, creating inflationary pressures that are a concern for many Americans. With the Federal Reserve recently announcing an accelerated tapering of asset purchases as well as several planned interest rate hikes in 2022, the hope is that the Fed does not choke off the recovery in its efforts to control further inflation.”

“The November MLFI-25 reflects both a monthly and cumulative year-over-year increase in business equipment investment as our economy recovers from the impact of the COVID pandemic,” Kirk Phillips, president and CEO of Wintrust Commercial Finance, said. “While there are headwinds — supply chain disruptions, increasing labor and material costs and now the potential for rising borrowing costs to offset inflationary pressures — businesses in many capital-intensive industries remain poised to capitalize on pent-up demand as soon as equipment is available.”

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