Leasing Activity Continues Down

June 25, 2020
Chart of the MLFI-25 finance index.

The Equipment Leasing and Finance Association’s (ELFA) Monthly Leasing and Finance Index (MLFI-25) showed new business volume for May was $6.7 billion, down 26 percent year-over-year from May 2019. Volume was down 18 percent month-to-month from $8.2 billion in April. Year-to-date, cumulative new business volume was up 2 percent compared to 2019.

The Index reports economic activity from 25 companies representing a cross section of the $900 billion equipment finance sector.

Credit approvals totaled 68.1 percent, down from 71.7 percent in April. Total headcount for equipment finance companies was down 2.2 percent year-over-year.

Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) rose to 45.8 in June, up from 25.8 in May.  

“The downturn in the economy precipitated by the Covid-19 pandemic crisis is responsible for new business softening in the equipment finance space during the month of May,” said

Ralph Petta, president/CEO, in a prepared statement. “This is evident in market segments serving customers in the construction, hotel, tourism, leisure and food service industries, in particular.”

Said Aylin Cankardes, president of Rockwell Financial Group, in a statement:

“The U.S. equipment finance market continues to see challenges with lower growth and delayed receivables due to the COVID-19 pandemic. Businesses have put a portion of their capital acquisitions on hold while realigning resources for their customers and employees. We are starting to see a gradual boost from the fiscal and monetary stimulus efforts but it continues to be uneven across industry sectors. On a bright note, our customers are getting a better grip on the disruption by balancing between resiliency and efficiency. As states continue to reopen it should help stabilize activity in the coming months.”

The MLFI-25 reflects capital expenditures, or the volume of commercial equipment financed in the U.S. It 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.

Source: ELFA