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 August was $7.0 billion, down 23 percent from $9.1 billion in July.
August volume was 24 percent lower than in August 2019. Year-to-day, cumulative new business volume was down 4 percent compared to 2019.
Receivables over 30 days were 2.40 percent, unchanged from the previous month and up from 2.00 percent the same period in 2019.
Credit approvals totaled 71.0 percent, down from 72.9 percent in July.
Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) in September is 56.5, an increase from the August index of 48.4.
“The sizeable drop in new business volume is testament to an economy that continues to struggle in certain industry sectors,” said ELFA president/CEO Ralph Petta in a prepared statement. “Seasonality also plays a role in the noticeable decline in equipment investment in the month of August. The hope is that Congress’s inability to enact additional stimulus legislation to combat the pandemic will not slow an economic recovery that many economists, including the Fed, are projecting for the third and fourth quarters.”
Said Willis Kleinjan, CEO of Northland Capital Equipment Finance, in a statement:
“The new monthly data gives reason for continued apprehension about the overall economy as COVID-19 maintains its grip on the country. We have seen with many of our customers in agriculture and construction that these essential industries continue to experience growth as they are minimally impacted by the virus. Low interest rates continue to fuel those businesses and industries that are the least affected by the pandemic and are using this opportunity to expand.”