ELFA’s Monthly Leasing and Finance Index Shows 5% Y/Y Decrease in September New Business Volume

According to the Equipment Leasing and Finance Association’s Monthly Leasing and Finance Index (MLFI-25), which reports economic activity from 25 companies representing a cross-section of the $1 trillion equipment finance sector, overall new business volume for September was $9.7 billion, down 5% year over year from new business volume in September 2022. In addition, volume was down 4% from $10.1 billion in August. Through September, cumulative new business volume was up 1.9 percent compared with the same time period in 2022.

Receivables more than 30 days were 2.3%, unchanged for the second consecutive month and up from 1.5% in the same period in 2022. Charge-offs were 0.36%, up from 0.34% in August and up from 0.17% in September 2022.

Credit approvals totaled 73.6%, down from 75.1% in August. Total headcount for equipment finance companies was down 2.7% year over year in September.

Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) in October is 40.1, a decrease from the September index of 50.3.

“Respondents to the September survey show a slight decline in new business volume, providing fresh evidence that liquidity issues brought about, in part, by high interest rates and stubborn inflation are having a somewhat negative impact on demand for business equipment in select sectors,” Ralph Petta, president and CEO of the ELFA, said. “Of equal or greater concern is the quality of equipment finance company portfolios, as losses and delinquencies continue to edge up slightly. Both bear monitoring as we enter the fourth quarter of the year.”

“After the positive growth of recent months, the September survey results underscore the near-term challenges being faced by the U.S. economy. With monetary policy remaining restrictive and the cloud of further rate hikes still hanging in the air, business confidence has continued to soften and curtail investment activity,” Bill Stephenson, global CEO at PEAC Solutions, said. “Our industry has demonstrated its resilience, having successfully navigated these economic headwinds for most of 2023 and delivering year-over-year growth. However, recent adverse events, such as the escalation of hostilities in the Middle East, will weigh on market sentiment and could further slow activity in the final months of the year.”

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