Equipment Leasing and Finance
Association’s Survey of Economic Activity: Monthly Leasing and Finance Index
September New Business Volume
Down 13 Percent Year-over-year, Up 24 Percent Month-to-Month, and Down 5
Percent Year-to-date
Washington, DC, October 23, 2020—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 September was $8.7
billion, down 13 percent year-over-year from new business volume in September
2019. Volume was up 24 percent month-to-month from $7 billion in August.
Year-to-date, cumulative new business volume was down 5 percent compared to
2019.
Receivables over 30 days were 2.00 percent, down from 2.40 percent
the previous month and up from 1.70 percent the same period in 2019.
Charge-offs were 0.82 percent, up from 0.75 percent the previous month and up
from 0.40 percent in the year-earlier period.
Credit approvals totaled 72.9 percent, up from 71.0 percent in
August. Total headcount for equipment finance companies was down 2.7 percent
year-over-year.
Separately, the Equipment Leasing & Finance Foundation’s
Monthly Confidence Index (MCI-EFI) in October is 55.0, easing from the
September index of 56.5.
ELFA President and CEO Ralph Petta said,
“Despite the drop in September year-over-year new business, a look at the data
beginning with the advent of the pandemic in February shows that the industry,
in general, is holding its own. In fact, anecdotal evidence from some ELFA
member companies indicates they are enjoying a very strong year. Tempering this
positive data point, however, is a spike in losses—not surprising, given that
the losses, in all likelihood, reflect customers in distressed industry sectors
significantly impacted by the economic downturn resulting from the COVID
pandemic.”
“The pandemic continues to have a negative impact on the overall
economy, and this data demonstrates that our industry is not immune. However,
the 24 percent growth in month-to-month volume in the September 2020 MLFI-25 is
promising,” said Anthony Sasso,
Head of TD Equipment Finance. “Within any disruption, there
is opportunity. Here at TDEF, we have seen our customers find innovative ways
to continue to grow, and we ourselves have been able to increase our portfolio.
The low interest rate environment, combined with rising spot rates within
trucking, presents a good opportunity for those companies who are in a position
to expand.”
About ELFA’s MLFI-25
The MLFI-25 is the only 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 at www.elfaonline.org/Data/MLFI/.
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.
About ELFA
The Equipment Leasing and Finance Association (ELFA) is the trade association
that represents companies in the nearly $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 575 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. For more
information, please visit www.elfaonline.org.
Follow ELFA:
Twitter: @ELFAonline
LinkedIn: www.linkedin.com/groups?gid=89692
Facebook: www.facebook.com/ELFApage
ELFA is the premier source for statistics and analyses concerning the equipment
finance sector. Please visit www.elfaonline.org/Data/ for additional information.
The Equipment Leasing & Finance Foundation is a 501c3
non-profit organization that propels the equipment finance sector—and its
people—forward through industry-specific knowledge, intelligence, and programs
that contribute to industry innovation, individual careers, and the overall
betterment of the equipment leasing and finance industry. The Foundation is
funded through charitable individual and corporate donations. Learn more at www.leasefoundation.org.
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