New business reported by U.S. companies that provide financing for capital equipment and software is growing at a double-digit rate as customers add machinery and workers in response to an accelerating national economy.
Demand for financing from industries including construction, medical equipment, trucking and professional services is showing its strongest growth since 2009, reflecting the economic upswing, and helped by low oil prices.
Growth for all of 2014, though not yet finalized, is likely to register 6% in a business that shows strong seasonal fluctuations. ELFA economists predict a similar rate for this year.
Companies seeking financing for big-ticket purchases have a wide choice of lenders as capital chases higher returns in an industry that weathered the recession relatively well, and which traditionally provides reliable returns for investors.
Lenders approved 78.1% of credit applications in February, down slightly from 78.6% in January but near an all-time high of 80%. Investor confidence in equipment financing is also shown by a charge-off rate of only 0.2%, a record low for the 12th consecutive month, and by a rate of receivables over 30 days at 1.1%