The Equipment Leasing and Finance Association’s (ELFA) Monthly Leasing and Finance Index, 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 July was $9.9 billion, up 9% year-over-year from new business volume in July 2020. Volume was down 5% month-to-month from $10.4 billion in June. Year-to-date, cumulative new business volume was up nearly 9% compared to 2020.
Receivables over 30 days were 1.9%, up from 1.8% the previous month and down from 2.4% in the same period in 2020. Charge-offs were 0.18%, down from 0.22% the previous month and down from 0.73% in the year-earlier period.
Credit approvals totaled 76.5%, down from 76.7% in June. Total headcount for equipment finance companies was down 13.9% year-over-year, a decrease due to significant downsizing at an MLFI reporting company.
Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index in August is 66.6, a decrease from the July index of 72.9.
ELFA President and CEO Ralph Petta said, “Despite supply chain disruptions in some sectors of the economy, signs of inflation, and emergence of the Delta coronavirus, July new business volume in the equipment finance industry is strong. Consumer spending is picking up, equity markets continue to advance, and unemployment is slowing—reasons to be optimistic about equipment investment and industry performance for the second half of the year.”
Jill McKean-Bilby, president of BOK Financial Equipment Finance, Inc., said, “2021 continues to be interesting. Demand for equipment remains high, which is resulting in higher equipment costs. Customers are ordering equipment from OEMs with very long lead times, with the delivery times of some orders unknown. The interest rate environment still remains low. Cash has been one of our main competitors this year, due to companies still having additional resources due to PPP loans. However, we have been able to continue to grow and remain steady with organic growth.”