ELFA: New business volume up 4% YoY
Receivables in February rose, credit approvals unchanged
New business volume in the equipment finance sector rose 4% year over year in February, according to new data from the Equipment Leasing and Finance Association (ELFA).
In February new business volume totaled $7.9 billion, up 4% YoY, but down 15% from $9.3 billion logged in January, according to the ELFA’s monthly leasing and finance index.
“Given continuing high interest rates and inflationary pressures, new business volume performed well in February,” Equipment Leasing and Finance Association (ELFA) President and Chief Executive Leigh Lytle said in a statement today. “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.”
Lytle said credit quality remained “elevated” on a YoY basis, adding that it “showed improvement, with delinquencies slowly returning to normal levels and charge-offs moving in a positive direction.”
BY THE NUMBERS
- Cumulative new business volume for 2024 is up 4.9% compared with 2023.
- Receivables over 30 days were 2.2%, down slightly from 2.3% in January, but up 1.8% YoY.
- Charge-offs were 0.4%, barely down from 0.5% the prior month and up .03% on a YoY basis.
- More equipment finance companies are hiring. ELFA noted that total headcount for these firms was up 1.8% YoY.
In January, David Normandin, chief executive of Chicago-based equipment lender Wintrust Specialty Finance, told Equipment Finance News that Wintrust was particularly attuned to credit quality among applicants. At the time, he said credit quality was “historically low” for small to midsize loans and leases as interest rates remain high.
Stan Walker, managing director of Citizens Asset Finance, said in the ELFA release today that he believed the industry was stabilizing “despite the continued high-interest-rate environment and uncertainty around when rates may fall.
“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,” Walker said. “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.”
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.
