Leasing Activity Down in February

Overall new-business volume in the equipment leasing industry fell 14 percent in February compared to January, to $7.1 billion from $8.3 billion. Compared to February 2021, volume was down 4 percent, according to the Monthly Leasing and Finance Index (MLFI-25) published by The Equipment Leasing and Finance Association (ELFA).

The report measures economic activity from 25 companies representing a cross section of the equipment finance sector.

Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) in March is 58.2, a decrease from 61.8 in February.

“New business volume at MLFI 25 companies has grown modestly in 2022, as it typically does in the early months,” said Ralph Petta, ELFA president/CEO, in a prepared statement. “What is eye-catching, however, is the extremely high credit quality reported by respondents. Geopolitical unrest, increasing interest rates, inflation and continuing supply disruptions all pose headwinds that bear monitoring.”

Stated Kris Foster, president of equipment finance, Pinnacle Financial Partners:

“With a quarter of the year nearly complete, we remain cautiously optimistic with steady deal flow and a strong pipeline. Supply chain constraints continue to be a major issue as we see equipment delivery delays for the foreseeable future. Positively, we see these delivery delays coupled with strong demand across most asset classes being a tailwind for future financing opportunities. Competition continues to be very strong with continued pressure on loan yield spreads. Credit quality and credit metrics are at historically strong levels; however, we are closely monitoring current geopolitical events, future Fed rate hikes, growing inflationary pressures on the broader economy, yield curve inversion and record high costs for many asset classes.” 

Source: ELFA