Washington, DC (Dec. 21, 2023) — 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 $8.3 billion, unchanged from new business volume in November 2022. Volume was down 19 percent from $10.4 billion in October. Year-to-date, cumulative new business volume was up 4.1 percent compared to 2022.
Receivables over 30 days were 2.0 percent, down from 2.5 percent in October and up from 1.7 percent in the same period in 2022. Charge-offs were 0.4 percent, unchanged from the previous month and up from 0.3 percent in the year-earlier period.
Credit approvals totaled 76 percent, unchanged from October. Total headcount for equipment finance companies was down 0.4 percent year-over-year.
Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) in December is 42.5, steady with the November index of 42.8. The MCI-EFI offers a qualitative assessment of both the prevailing business conditions and expectations for the future as reported by a cross-section of equipment finance executives.
ELFA President and CEO Leigh Lytle said, “Moving into the final month of the year, MLFI participants report mixed performance. Year-to-date originations are healthy despite some softness in year-over-year and month-to-month November data. Both losses and delinquencies show more acceptable levels, and no further rate increases by the Fed for the foreseeable future is more good news. With the increasing likelihood of a ‘soft landing’ the equipment finance industry should have a positive year-end.”
George Parker, Co-CEO, VenSource Capital LLC, said, “In November, equipment finance firms continued to showcase their resilience. While some segments continue to recover, most of our industry performed well. Facing sharply higher interest rates, inflationary pressures and geopolitical uncertainties, most industry firms have adapted and found ways to make strides. Even with a dip in monthly volume from October, year-to-date levels show an encouraging uptick. Also reassuring, 30-day delinquencies and charge-offs remain relatively low and steady. These results suggests that our industry is doing a great job of navigating current conditions and is well positioned to leverage opportunities once economic conditions stabilize.”
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 business for success for more than 60 years.
