Deal volume was sluggish in the back half of 2023, with many portfolios yet to reset to the elevated interest rate environment. With charge-offs increasing 0.8% compared to the previous quarter, paired with the 4.9% year-over-year decrease in new business volume, these indicators could point to a downward trend in the industry for the coming year.

Predictions of the Fed not cutting rates and the ongoing economic uncertainty continue to pose headwinds for the industry, but independent lenders reported continued demand from borrowers seeking flexible financing alternatives as banks maintain tighter credit standards.

The ELFA’s monthly survey of key industry executives reported a decrease in confidence from the third quarter of 2023. While the sector continues to face substantial headwinds, leaders see promise in the resilience it has shown thus far.