The Equipment Leasing and Finance Association’s (ELFA) latest Monthly Leasing and Finance Index (MLFI-25), which tracks economic activity from 25 companies across the $1 trillion U.S. equipment finance sector, revealed promising growth in July 2024:
- New business volume (NBV) reached $11.1 billion, marking a 13% increase compared to July 2023.
- Month-over-month, NBV also grew by 11% from June’s $10 billion.
- Year-to-date, cumulative NBV was up 5.5% compared to the same period in 2023.
Additional Key Insights:
- Receivables over 30 days were at 2.5%, a rise from 2.0% in June and 2.3% in July 2023.
- Charge-offs increased to 0.5%, similar to the previous month but up from 0.3% over the past 12 months.
- Credit approvals improved slightly to 75.8%, up from June’s 75.0%.
- The total headcount for equipment finance companies increased by 3% year-over-year.
In August, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index reached 58.4, the highest level in more than two years, and a notable rise from July’s index of 50.7.
Industry Leadership Perspectives
ELFA President and CEO Leigh Lytle commented, “The July MLFI report highlights strong demand despite some challenges in financial conditions. Originations saw double-digit growth, though bank activity showed signs of slowing. Given that banks account for over half of equipment finance, their continued pullback and the role of captives and independents will be key in the coming months. While credit quality showed some deterioration, with both receivables and losses increasing, industry leaders remain optimistic that equipment demand will stay healthy through the second half of the year as the Federal Reserve begins to ease monetary policy.”
Amrita Patel, Head of Equipment Finance at Wells Fargo, added, “The equipment finance sector continues to display strength, with growing demand projected into 2025. If potential rate cuts occur in September, we may see an uptick in equipment replacement and acquisition, especially among larger companies moving through capital expenditure cycles.”
About ELFA’s MLFI-25: The MLFI-25 is the industry’s only near-real-time indicator that reflects the volume of commercial equipment financed in the U.S. Released monthly from Washington, D.C., it complements other financial indicators, offering a clear picture of U.S. business investments in productive assets. The index is based on data from 25 leading companies and provides a comprehensive view of the equipment finance market.
About ELFA: The Equipment Leasing and Finance Association (ELFA) represents financial services firms and manufacturers in the U.S. equipment finance sector. ELFA’s 575-member companies help businesses acquire the equipment needed to grow and thrive. For more information on how equipment financing drives business success and fuels economic growth, click here.
