May New Business Volume in Equipment Finance Rises 16% Y/Y, Falls 10% M/M

According to the Equipment Leasing and Finance Association’s Monthly Leasing and Finance Index (MLFI-25), overall new business volume in the equipment finance industry for May was $9.4 billion, up 16% year over year from new business volume in May 2021. However, volume in May was down 10% from $10.5 billion on a month-over-month basis. Year-to-date cumulative new business volume was up nearly 8% compared with the same time period in 2021.

Receivables more than 30 days were 1.6%, down from 2.1% in April and down from 1.9% in May of 2021. Charge-offs were 0.12%, up from 0.05% in April and down from 0.3% in May of 2021.

Credit approvals totaled 76.8%, down from 77.4% in April. Total headcount for equipment finance companies was down 3% year over year in May.

Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) in June is 50.9, an increase from 49.6 in May.

“May activity for MLFI-25 equipment finance company participants shows strong origination volume and very stable credit quality metrics,” Ralph Petta, president and CEO of the ELFA, said. “The economy continues to provide jobs, and corporate America, in general, reports strong balance sheets, all in the face of a waning health pandemic. Offsetting this good news is high inflation, creating havoc for many consumers, and continued supply chain disruptions and higher interest rates, which are squeezing much of the business sector. As a result, many equipment finance providers approach the summer months with guarded optimism.”

“The sustained rising interest rate environment coupled with pandemic overhang and extreme supply chain bottlenecks have pushed for a greater need in the equipment financing industry,” Scott Dienes, senior vice president and head of equipment finance and leasing at Associated Bank, said. “With this in mind, the market has continued a year-over-year increase in new business volume, which leads us to continue to be cautiously optimistic going forward with nearly half the year complete.”