ELFA Survey Shows January New Business Volume Up 6% Year Over Year

The Monthly Leasing and Finance Index (MLFI-25) by the Equipment Leasing and Finance Association (ELFA) (https://www.elfaonline.org/) reflects economic activity from 25 companies spanning the $1 trillion equipment finance sector. In January, these companies saw a total new business volume of $9.3 billion, marking a 6% increase compared to January 2023. However, this volume dropped by 26% from December, which typically experiences a spike in new business activity due to end-of-quarter and end-of-year dynamics. Receivables over 30 days remained steady at 2.3%, while charge-offs rose to 0.5% from the previous month's 0.4% and from 0.3% in the same period last year. Credit approvals climbed to 76% from December's 75%, and total headcount for equipment finance companies grew by 1.4% 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, SVP, Managing Director, Operations & Strategic Development, Flagstar Financial & Leasing LLC, 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.” Additionally, the Equipment Leasing & Finance Foundation's Monthly Confidence Index (MCI-EFI) for February stands at 51.7, showing an improvement from January's 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. 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” ELFA President and CEO Leigh Lytle said. “Credit quality bears monitoring since delinquencies and charge-offs, in particular, remain elevated year over year.”