January New Business Volume in Equipment Finance Industry Falls 12% Y/Y, 33% M/M

According to the Equipment Leasing and Finance Association’s Monthly Leasing and Finance Index, overall new business volume for January 2021 was $8.1 billion, down 12% year over year from new business volume in January 2020. Volume was down 33% month to month from $12.1 billion in December following what the ELFA called the typical end-of-quarter, end-of-year spike in new business activity.

“New business volume was relatively soft in January, as is typical for early Q1 business activity for many equipment finance companies,” Ralph Petta, president and CEO of the ELFA, said. “Portfolio quality for reporting companies is in the healthy range as well. Preliminary economic projections indicate that equipment finance activity should accelerate as overall conditions in the U.S. economy improve in 2021. Time will tell.”

Receivables more than 30 days were 2.2%, unchanged from the previous month and up from 2% in the same period in 2020. Charge-offs were 0.47%, down from 0.59% the previous month and unchanged from the year-earlier period.

Credit approvals totaled 76.2%, up from 75.2% in December. Total headcount for equipment finance companies was down 4.9% year over year.

Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) in February is 64.4, an increase from the January index of 59.6.

“2021 pipelines are steady and competitive. We notice continued demand for replacement CAPEX and are hearing several equipment vendors speak of manufacturing backlogs,” Chris Bucher, president of Hancock Whitney Equipment Finance, said.

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