Equipment Finance New Business Volume Inches Up 1% in May

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 in the industry in May was $9.5 billion, up 1% year over year from new business volume in May 2022. Volume was down 2% from $9.7 billion in April. Year-to-date, cumulative new business volume was up 0.9% compared to 2022.

Receivables more than 30 days were 2%, up from 1.8% in April and up from 1.6% in the same period in 2022. Charge-offs were 0.33%, unchanged from April and up from 0.12% in the year-earlier period.

Credit approvals totaled 76.4%, down from 77.3% in April, while total headcount for equipment finance companies was down 2.5% year over year in May.

Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) in June is 44.1, an increase from the May index of 40.6.

“MLFI respondents show steady new business volume for the month of May. As the Fed puts a pause on interest rate hikes and the U.S. economy refuses to accede to a recession — at least for the time being — equipment finance companies continue to do what they do best, i.e., provide the necessary capital for businesses to grow and prosper,” Ralph Petta, president and CEO of the ELFA, said. “A number of equipment finance executives polled recently have expressed a sense of heightened optimism that the industry will continue to show steady growth, at least in the near term.”

“We are cautiously optimistic about the stability of the economy based on both the recent indicators and what continues to be resilient demand from businesses,” Daryn Lecy, vice president and chief operating officer at Oakmont Capital Services, said. “The tightened liquidity remains a concern, but we have seen some small signs of localized stabilization with previously shy banks and finance companies slowly showing interest in exploring equipment finance assets. Our industry provides great support during these times by continuously thinking creatively, remaining nimble and finding niches and opportunities as they arise.”

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