Digital contracting slips amid industry volatility

Digital contracting in equipment finance slipped during the first quarter as tariff uncertainty slowed financing. 

Wolters Kluwer’s e-contracting index increased 7.3% year over year in Q1, while the four-year trend shows a sustained annual growth trend of 25% in digital adoption since Q1 2021, Eric Capehart, associate director of market strategy for Wolters Kluwer’s digital lending solutions, told Equipment Finance News.  

Meanwhile, activity decreased by 4.5% quarter over quarter in Q1, as the equipment finance industry navigated a slow first quarter. 

“As you look at the quarter-over-quarter activity … you can see those ebbs and flows,” he said. However, Capehart emphasized that the overall trend is to “adoption gradually increasing, and that’s what we want to continue to see.” 

New business volume in the equipment finance industry also declined 0.8% YoY to $29.4 billion in the first quarter, according to the Equipment Leasing and Finance Association’s CapEx Finance Index, released April 23.  

Tariff implications affected equipment financing and manufacturing loans during the first quarter, Brookline Bank Chairman and Chief Executive Paul Perrault said during the company’s April 24 earnings call. 

 “When we look at new credits that have become part of the underwriting process to see how that might have affected things …  it is having a dampening effect on everything as we go forward, but there’s nothing tangible yet,” Perrault said. 

It is essential that organizations align their plans — whether over one, three or five years — to their broader long-term goals and mission, Wolters Kluwer’s Capehart said. 

“Digital transformation, e-contracting or e-signature; things shouldn’t happen in isolation from the rest of the business,” he said. “It should be happening in conjunction and in harmony the rest of the business.” 

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