Equipment Finance Originations Decline 8% Year Over Year

New equipment finance business was estimated to be $9.7 billion in April 2023, a decline of 8% from April 2022, according to the Equipment Leasing and Finance Association’s (ELFA) Monthly Leasing and Finance Index (MLFI-25). Receivables were also down 2.1%, while charge-offs increased 28 bps over last year. According to ELFA’s President and CEO, Ralph Petta, “It is not clear whether increased borrowing rates are constraining liquidity or if this decrease in originations is merely a blip in an otherwise healthy marketplace.” Financial Partners Group’s Jeffrey LaLima remains optimistic, stating that equipment finance seems to be well positioned as “companies and consumers remain resilient and are more mindful of the role financing plays as part of strategic long-term capital decisions.” Nevertheless, lenders will likely be monitoring origination volume and portfolio quality closely as high interest rates and inflation continue to challenge the market.