Equipment finance industry views economy with ‘cautious optimism’

The Equipment Leasing and Finance Association’s (ELFA) Monthly Leasing and Finance Index showed overall new business volume for May was $9.4 billion, up 16% year-on-year. the other relative to the volume of new business in May 2021.

ELFA

The Equipment Leasing and Finance Association (ELFA) has released its Monthly Leasing and Finance Index for the month of May.

The index, which tracks economic activity based on feedback from 25 equipment finance companies, was $9.4 billion, up 16% year-over-year compared to new business volume in May 2021. Volume was down 10% from $10.5 billion in April. Since the beginning of the year, the cumulative volume of new business has increased by almost 8% compared to 2021.

“May activity for participants in MLFI-25 equipment finance companies shows strong origination volume and very stable credit quality metrics,” said Ralph Petta, President and CEO of ELFA. “The economy continues to provide jobs and American businesses, in general, are showing strong balance sheets – all in the face of a waning health pandemic. This good news is offset by high inflation, creating havoc for many consumers, along with continued supply chain disruptions and higher interest rates, which are compressing much of the corporate sector.As a result, many equipment finance providers are heading into the summer months with cautious optimism.

Receivables were 1.6%, compared to 2.1% the previous month and compared to 1.9% in the same period in 2021. Charges were 0.12%, compared to 0.05% the previous month and compared to 0 .30% the previous year.

Credit approvals totaled 76.8%, compared to 77.4% in April. Total headcount at equipment finance companies was down 3% year-over-year.

The Equipment Leasing & Finance Foundation (MCI-EFI) Monthly Confidence Index in June is 50.9, up from 49.6 in May.

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