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 December was $12.1 billion, down 6 percent year-over-year from new business volume in December 2019. Volume was up 66 percent month-to-month from $7.3 billion in November in a typical end-of-year spike. Cumulative new business volume for 2020 was down almost 6 percent compared to 2019.
Receivables over 30 days were 2.20 percent, down from 2.30 percent the previous month and unchanged from the same period in 2019. Charge-offs were 0.59 percent, down from 0.61 percent the previous month and up from 0.51 percent in the year-earlier period.Credit approvals totaled 75.2 percent, up from 70.4 percent in November. Total headcount for equipment finance companies was down 4.6 percent year-over-year.
Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) in January is 59.6, unchanged from the December index.
ELFA President and CEO Ralph Petta said, “While 2020 certainly presented serious challenges to our nation’s economic well-being as well as to the physical well-being of many of our citizens, the equipment finance business, overall, showed remarkable resilience and durability. In early 2020, our industry seemed poised to continue 2019’s strong performance, as measured by a variety of key metrics. Now, looking in the rearview mirror, at the start of a new year that brings such hope and promise—with new stimulus initiatives coming out of Washington and distribution of a vaccine designed to protect our people—most equipment finance sector observers would consider a single-digit decline in year-over-year new business volume tolerable, if not acceptable.”