The Equipment Leasing and Finance Association’s monthly index of 25 equipment finance companies found that new business volume rose 6% year-over-year in January to $9.3 billion.
However, new business volume was down 26% from the total of $12.5 billion in December 2023. ELFA attributed this to a return to the norm after a “typical” spike in new business at the end of the year.
“The optimism I expressed in last month’s monthly leasing and finance index continues as 2024 gets off to a strong start with solid new business volume and increased industry confidence,” ELFA President and Chief Executive Leigh Lytle said in a release.
“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.”
Lytle is especially attuned to credit quality which, she said, “bears monitoring since delinquencies and charge-offs, in particular, remain elevated year over year.”
Credit quality is an ongoing concern for all lenders.
David Normandin, chief executive of Chicago-based equipment lender Wintrust Specialty Finance, recently told Equipment Finance News that his firm is seeing historically low credit quality in small to midsize applicants for loans and leases.
By the numbers
- Receivables over 30 days were 2.3%, unchanged from the previous month and up from 1.9% in January 2023.
- Charge-offs were 0.5%, up from 0.4% the previous month and 0.3% in January 2023.
- Credit approvals were up minimally from 75% in December 2023 to 76% in January 2024.
- Total headcount for the 25 companies surveyed was up 1.4% YoY.
“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,” Flagstar Financial & Leasing Managing Director Bobby Campbell said in the ELFA release. “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,” Campbell added.
Registration is now open for Equipment Finance Connect, the nation’s only dealer-centric equipment lending and leasing event, which will take place May 5-7 in Nashville, Tenn. Learn about the event and free dealer registration at EquipmentFinanceConnect.com.
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