Equipment Leasing and Finance Association’s monthly leasing and finance index
February new business volume up 4 percent year-over-year, down 15 percent month-to-month, up 4.9 percent year-to-date.
The Equipment Leasing and Finance Association’s (ELFA) Monthly Leasing and Finance Index (MLFI-25), which reports economic activity from 25 companies representing a cross section of the $1 trillion equipment finance sector, showed their overall new business volume for February was $7.9 billion, up 4 percent year-over-year from new business volume in February 2023. Volume was down 15 percent from $9.3 billion in January. Year-to-date, cumulative new business volume was up 4.9 percent compared to 2023.
Receivables over 30 days were 2.2 percent, down from 2.3 percent the previous month and up from 1.8 percent in the same period in 2023. Charge-offs were 0.4 percent, down from 0.5 percent the previous month and up from 0.3 percent in the year-earlier period.
Credit approvals totaled 76 percent, unchanged from January. Total headcount for equipment finance companies was up 1.8 percent year-over-year.
Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) in March is 55.2, an increase from the February index of 51.7 and the highest level since April 2022.
“Given continuing high interest rates and inflationary pressures, new business volume performed well in February. 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. Credit quality, while still elevated year over year, showed improvement with delinquencies slowly returning to normal levels and charge-offs moving in a positive direction,” says Leigh Lytle, ELFA president and CEO.
“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. Despite the continued high interest rate environment and uncertainty around when rates may fall, Citizens is helping clients move forward with new equipment solutions both for growth and replacement needs. 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,” says Stan Walker, managing director at Citizens Asset Finance.
About ELFA’s MLFI-25
The MLFI-25 is the only near-real-time index that reflects capex, or the volume of commercial equipment financed in the U.S. The MLFI-25 is released globally at 8 a.m. Eastern time from Washington, D.C., each month on the day before the U.S. Department of Commerce releases the durable goods report. The MLFI-25 is a financial indicator that complements the durable goods report and other economic indexes, including the Institute for Supply Management Index, which reports economic activity in the manufacturing sector. Together with the MLFI-25 these reports provide a complete view of the status of productive assets in the U.S. economy: equipment produced, acquired and financed.
The MLFI-25 is a time series that reflects two years of business activity for the 25 companies currently participating in the survey. The latest MLFI-25, including methodology and participants, is available at www.elfaonline.org/knowledge-hub/mlfi-25-monthly-leasing-and-finance-index.
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