Equipment Financing Grew 2.5% in 2016, According to New Report
July 14, 2017 — New business volume grew 2.5% in the equipment finance industry in 2016, according to the 2017 Survey of Equipment Finance Activity (SEFA) released today by the Equipment Leasing and Finance Association (ELFA). The rise in new business volume marked the seventh consecutive year that businesses increased their spending on capital equipment. The SEFA report covers key statistical, financial and operations information for the $1 trillion equipment finance industry, based on a comprehensive survey of 115 ELFA member companies..
ELFA also released a companion report to the 2017 SEFA called the 2017 Small-Ticket Survey of Equipment Finance Activity. The report, which focuses on small-ticket and micro-ticket equipment transactions among the SEFA respondents, found that new business volume in the small-ticket space grew by 10.7% in 2016.
ELFA President and CEO Ralph Petta said, "The equipment finance industry continues a slow-growth trajectory, mirroring a fundamentally sound—if unspectacular—U.S. economy during the past several years. Despite a slowly rising interest rate environment, leasing and finance companies are profitable entities, with generally healthy portfolios and sustainable levels of returns. Although the makeup of the SEFA respondent base varies widely in terms of size, markets served, financial results and business operations, they are all bound by one common characteristic: they make meaningful contributions to the health of our nation's economy by enabling businesses, both large and small, to acquire the necessary equipment to run their business operations."
Key findings for 2016 as reported in the 2017 SEFA include:
- Overall new business volume grew 2.5%. While this rate contrasts sharply with the 12.4% growth reported for 2015, the industry nonetheless outperformed the national economy, which grew just 1.6% in 2016, according to the U.S. Department of Commerce.
- By organization type: Independents saw a 12% increase in new business volume, while banks saw a 5% increase and captives saw a 5.9% decrease.
- By market segment: New business volume grew 5.2% in the middle ticket segment and 0.8% in small-ticket, while large ticket declined 1.8%.
PricewaterhouseCoopers LLP administered the 2017 SEFA. The results were compiled from surveys sent to 375 eligible ELFA member companies in the first quarter of 2017. A total of 115 companies submitted 2016 U.S. domestic lease and loan data.