Washington, DC (Dec. 21, 2022) — The Equipment Leasing and Finance Association’s (ELFA) 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, showed their overall new business volume for November was $8.6 billion, up 9 percent year-over-year from new business volume in November 2021. Volume was down 24 percent from $11.3 billion in October. Year-to-date, cumulative new business volume was up 6 percent compared to 2021.
Receivables over 30 days were 1.7 percent, unchanged from the previous month and down from 2.2 percent in the same period in 2021. Charge-offs were 0.27 percent, up from 0.26 percent the previous month and up from 0.20 percent in the year-earlier period.
Credit approvals totaled 77.7 percent, up from 77.0 percent in October. Total headcount for equipment finance companies was down 4.7 percent year-over-year.
Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) in December is 45.9, an increase from the November index of 43.7.
ELFA President and CEO Ralph Petta said, “Moving into the final month of the year, equipment finance companies report solid performance. Rising interest rates seem to have little or no effect on origination volume in November. The economy grew in Q3—albeit slowly—and is expected to do so again in the current quarter. Labor markets are stable, inflation woes appear to be abating, consumers are spending, and businesses continue to expand and grow: a recipe for stable growth by providers of equipment financing.”
Patrick Hoiby, president, Equify Financial, LLC, said, “New volume continues to be very strong despite continued rate hikes. Charge-offs and delinquency are remaining in check and overall credit quality is good. Employee count is hard to measure because many companies wish to expand, but are having hard times finding people.”
About ELFA’s MLFI-25
The MLFI-25 is the only near-real-time index that reflects capex, or the volume of commercial equipment financed in the U.S. The MLFI-25 is released globally at 8 a.m. Eastern time from Washington, D.C., each month on the day before the U.S. Department of Commerce releases the durable goods report. The MLFI-25 is a financial indicator that complements the durable goods report and other economic indexes, including the Institute for Supply Management Index, which reports economic activity in the manufacturing sector. Together with the MLFI-25 these reports provide a complete view of the status of productive assets in the U.S. economy: equipment produced, acquired and financed.
The MLFI-25 is a time series that reflects two years of business activity for the 25 companies currently participating in the survey. The latest MLFI-25, including methodology and participants, is available here.
The MLFI-25 is part of the Knowledge Hub, the source for business intelligence in the equipment finance industry. Visit the hub here.
MLFI-25 Methodology
ELFA produces the MLFI-25 survey to help member organizations achieve competitive advantage by providing them with leading-edge research and benchmarking information to support strategic business decision-making.
The MLFI-25 is a barometer of the trends in U.S. capital equipment investment. Five components are included in the survey: new business volume (originations), aging of receivables, charge-offs, credit approval ratios, (approved vs. submitted) and headcount for the equipment finance business.
The MLFI-25 measures monthly commercial equipment lease and loan activity as reported by participating ELFA member equipment finance companies representing a cross-section of the equipment finance sector, including small-ticket, middle-market, large-ticket, bank, captive and independent leasing and finance companies. Based on hard survey data, the responses mirror the economic activity of the broader equipment finance sector and current business conditions nationally.
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About ELFA
The Equipment Leasing and Finance Association (ELFA) is the trade association that represents companies in the $1 trillion equipment finance sector, which includes financial services companies and manufacturers engaged in financing capital goods. ELFA members are the driving force behind the growth in the commercial equipment finance market and contribute to capital formation in the U.S. and abroad. Its 580 members include independent and captive leasing and finance companies, banks, financial services corporations, broker/packagers and investment banks, as well as manufacturers and service providers. ELFA has been equipping businesses for success for more than 60 years.
