Equipment Finance New Business Volume Up 6% Y/Y in January

The Equipment Leasing and Finance Association’s Monthly Leasing and Finance Index (MLFI-25), which reports economic activity from 25 companies representing a crosssection of the $1 trillion equipment finance sector, showed overall new business volume for January was $9.3 billion, up 6% year-over-year from new business volume in January 2023. Volume was down 26% from $12.5 billion in December following the typical end-of-quarter, end-of-year spike in new business activity.

Receivables over 30 days were 2.3%, unchanged from the previous month and up from 1.9% in the same period in 2023. Charge-offs were 0.5%, up from 0.4% the previous month and up from 0.3% in the year-earlier period. Credit approvals totaled 76%, up from 75% in December. Total headcount for equipment finance companies was up 1.4% year-over-year.

Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) in February is 51.7, an increase from the January index of 48.6.

“The optimism I expressed in last month’s MLFI continues as 2024 gets off to a strong start with solid new business volume and increased industry confidence,” Leigh Lytle, president and CEO of ELFA, said. “It’s especially encouraging to kick off in positive territory since equipment investment—the lifeblood of the equipment finance industry—is forecast to pick up in the second half of the year. Credit quality bears monitoring since delinquencies and charge-offs, in particular, remain elevated year over year.”

“Our equipment finance industry has kicked off 2024 with a stronger launch than a year before on the heels of an extremely active fourth quarter,” Bobby Campbell, senior vice president, managing director, operations and strategic development at Flagstar Financial & Leasing, said. “Many finance companies remain cautious within certain segments of the trucking industry, though credit concerns and delinquency are beginning to level off with hopes of a near-term positive inflection. With several bank finance players facing ongoing liquidity challenges, strong independents and captives should continue to take advantage of capturing additional market share in the months ahead.”

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