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 their overall new business volume for January was $9.3 billion, up 6 percent year-over-year from new business volume in January 2023. Volume was down 26 percent 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 percent, unchanged from the previous month and up from 1.9 percent in the same period in 2023. Charge-offs were 0.5 percent, up from 0.4 percent the previous month and up from 0.3 percent in the year-earlier period.
Credit approvals totaled 76 percent, up from 75 percent in December. Total headcount for equipment finance companies was up 1.4 percent 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.
ELFA President and CEO Leigh Lytle said, “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. 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.”
Bobby Campbell, Senior Vice President, Managing Director, Operations & Strategic Development, Flagstar Financial & Leasing LLC, said, “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. 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.”