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 $1 trillion equipment finance sector, showed the industry recorded $7.9 billion in overall new business in February, up 4% year over year from new business volume in February 2023. However, volume was down 15% from $9.3 billion in January. Year-to-date, cumulative new business volume was up 4.9% compared to 2023.
Receivables over 30 days were 2.2% in February, down from 2.3% the previous month and up from 1.8% in the same period in 2023. Charge-offs were 0.4%, down from 0.5% the previous month and up from 0.3% in the year-earlier period.
Credit approvals totaled 76% in February, unchanged from January. Total headcount for equipment finance companies was up 1.8% year over year.
Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) in March is 55.2, an increase from the February index of 51.7 and the highest level since April 2022.
“Given continuing high interest rates and inflationary pressures, new business volume performed well in February,” Leigh Lytle, president and CEO of the ELFA, said. “Tightening lending standards at banks are expanding opportunities for independent and captive equipment finance companies to provide critical productive assets that businesses need to operate. Credit quality, while still elevated year over year, showed improvement with delinquencies slowly returning to normal levels and charge-offs moving in a positive direction.”
“As we’ve turned to March, the equipment finance industry continues to show its resiliency as evidenced by the second straight month of higher business volume year over year,” Stan Walker, managing director of Citizens Asset Finance, said. “Despite the continued high interest rate environment and uncertainty around when rates may fall, Citizens is helping clients move forward with new equipment solutions both for growth and replacement needs. After a turbulent 2023, Citizens and most equipment finance groups in the banking sector are targeting growth by focusing on supporting their client base as trusted partners and adding select prospects where we can deliver smart advice and solutions.”
