Equipment Finance New Business Volume Rises 9% Y/Y in February

According to the Equipment Leasing and Finance Association’s Monthly Leasing and Finance Index (MLFI-25), overall new business volume for February was $7.4 billion, up 9% year over year from new business volume in February 2020. Volume was down 9% month to month from $8.1 billion in January. Year-to-date cumulative new business volume in the first two months of 2021 was down almost 4% compared with the same period in 2020.

Receivables more than 30 days were 2.1%, down from 2.2% the previous month and up from 2% in the same period in 2020. Charge-offs were 0.55%, up from 0.47% the previous month and up from 0.51% in the year-earlier period.

Credit approvals totaled 76.8%, up from 76.2% in January. Total headcount for equipment finance companies was down 4.2% year over year.

Separately, according to the Equipment Leasing & Finance Foundation’s March 2021 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI), overall confidence in the equipment finance market is 67.7, an increase from the February index of 64.4 and the highest level since April 2018.

“February metrics show healthy new business growth compared to the same period pre-pandemic last year,” Ralph Petta, president and CEO of the ELFA, said. “As vaccine distribution picks up across the country, labor markets improve and interest rates remain low, the U.S. economy will only improve as we move into Q2. Business confidence is at an historic high as measured by our foundation’s Monthly Confidence Index (MCI). All this bodes well for business growth and expansion and the accompanying accelerating demand for productive equipment.”

“It’s encouraging to see new business volume and confidence levels increase as organizations continue to deal with the financial impact of the pandemic,” Christopher Johnson, president of financial services at Pitney Bowes, said. “The results should provide a glimmer of hope to small- and lower middle-market businesses in particular — they’ve been hit the hardest and have found it much more difficult to secure capital than larger companies. The pandemic may have been a setback to many of these businesses, but they are poised to come out of the crisis stronger, as they are well positioned to capture the upswing in growth. While we did see an initial uptick in delinquency, in line with the market, our portfolio has performed well through the pandemic. Now is the time for the lending community to step up and support these businesses who are an important segment of our economy. Pitney Bowes has over 100 years of experience supporting our 750,000 small business clients. We have a robust history of lending, we have access to capital and we have been firm in our commitment to Main Street.”

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