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ELFA: Equipment Finance Biz Up 8% - Construction Equipment

January 4, 2022

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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 $900 billion equipment finance sector, showed their overall new business volume for November was $7.9 billion, up 8 percent year-over-year from new business volume in November 2020.

Volume was down 26 percent month-to-month from $10.7 billion in October. Year-to-date, cumulative new business volume was up 10 percent compared to 2020.

Receivables over 30 days were 2.2 percent, up from 1.7 percent the previous month and down from 2.3 percent in the same period in 2020. Charge-offs were 0.20 percent, up from 0.16 percent the previous month and down from 0.61 percent in the year-earlier period.

Credit approvals totaled 77.2 percent, down from 78 percent in October. Total headcount for equipment finance companies was down 9.9 percent year-over-year, a decrease due to significant downsizing at an MLFI reporting company.

Separately, the Equipment Leasing Finance Foundation’s Monthly Confidence Index (MCI-EFI) in December is 63.9, a decrease from the November index of 64.6.

“As we get ready to close out 2021, industry volume is still holding up, with portfolio quality improved relative to the same period last year," said ELFA president and CEO Ralph Petta. "Supply chain disruptions continue to plague an otherwise strong economy, creating inflationary pressures that are a concern for many Americans. With the Federal Reserve recently announcing an accelerated tapering of asset purchases as well as several planned interest rate hikes in 2022, the hope is that the Fed does not choke off the recovery in its efforts to control further inflation.”

Construction Equipment's exclusive Annual Report Forecast, a comprehensive take on industry conditions for 2022, is available here.

Source: ELFA