Equipment Finance New Business Volume in September Up 11% Y/Y

According to the Equipment Leasing and Finance Association’s Monthly Leasing and Finance Index (MLFI-25), new business volume for September was $10.2 billion, up 11% year over year from new business volume in September 2021.Volume was up 16% from $8.8 billion in August. Year-to-date, cumulative new business volume was up nearly 6% compared to 2021.

Receivables over 30 days were 1.5%, unchanged from the previous month and down from 1.6% in the same period in 2021. Charge-offs were 0.17%, unchanged from the previous month and down from 0.35% in the year-earlier period.

Credit approvals totaled 77.3%, up from 75.2% in August. Total headcount for equipment finance companies was down 2.4% year-over-year.

Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) in October is 45, a decrease from the September index of 48.7.

“Third quarter new business volume in the over-$1 trillion equipment finance industry is exceptionally strong, providing fresh evidence that the economic contraction projected by many economists has not yet arrived,” Ralph Petta, CEO and president of ELFA, said. “Another data point supporting this relatively benign economic scenario is extremely low delinquencies, indicating that end users of commercial equipment continue to make on-time payments to their finance providers.”

“Despite continued challenges in the supply chain, inflationary pressures and rising interest rates, the industry and our finance company continue to grow,” Hollis Bufferd, CEO of Star Hill Financial, said. “Like our peers, we have continued expectations for the balance of 2022, as end-users plan for year-end capital acquisitions. Charge-offs and delinquencies remain at historic lows. The probability of continued Fed interest rate increases on the horizon creates some uncertainty, but we are seeing increased demand for fixed rate leases and loans to support our clients’ capital expenditures. With an eye on global economic disruptions, I am cautiously optimistic.”

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