Report: Equipment Leasing Sector Sees March Dip in New Business Volume

The Equipment Leasing and Finance Association (ELFA) released its Monthly Leasing and Finance Index (MLFI-25) for March, offering insights into economic trends within the equipment finance sector. Representing a diverse sample of 25 companies in the $1 trillion industry, the index revealed that new business volume for the month amounted to $9.3 billion, marking a 7% decline compared to March 2023. However, this volume saw an 18% increase from February, reaching $7.9 billion. Year-to-date figures showed a modest 0.5% rise compared to the same period last year.

Regarding delinquencies, receivables over 30 days decreased slightly to 2.1%, down from 2.2% in the previous month but slightly higher than the 1.9% recorded in March 2023. Charge-offs increased to 0.5%, up from 0.4% in February and 0.3% in the same period last year.

On the credit front, approvals rose to 77% in March, showing a slight improvement from 76% in February. Furthermore, the total headcount for equipment finance companies increased by 1.5% compared to the previous year.

In a separate report, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) for April declined to 52.9 from the March index of 55.2, reflecting a dip in industry confidence.

Commenting on the report, ELFA President and CEO Leigh Lytle said, “Some pullback in new business volume in March largely reflects the effect of banks tightening their lending. Instead of a customary end-of-quarter spike, banks saw originations fall more than 20% in March, while other respondents enjoyed a stronger month. Credit quality is mixed, with receivables continuing to improve while charge-offs ticked back up. Interestingly, results of an informal poll of MLFI-25 respondents indicate some customers are limiting their equipment acquisitions until interest rates come down, which supports our Foundation’s forecast that equipment and software investment should pick up in the latter part of the year when the Fed is expected to begin its rate cuts. Along with the improved GDP growth forecast, we remain cautiously optimistic for continued growth for our industry.”