Washington, D.C., (Sept. 11, 2019)—New business volume grew 4.4% in the equipment finance industry in 2018, according to the “2019 Survey of Equipment Finance Activity” (SEFA) released by the Equipment Leasing and Finance Association (ELFA).
The rise was lower than the 6.9% increase achieved in 2017 but surpassed real gross domestic product (GDP), which grew 2.9 percent in 2018. The rise in new business volume marked the ninth 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 126 ELFA member companies.
ELFA also released a companion report to the 2019 SEFA called the “2019 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 9.6% in 2018.
Key findings for 2018 as reported in the 2019 SEFA include:
- New business volume grew 4.4% in 2018. By organization type, independents saw a 14.6% increase in new business volume, captives saw a 6.1% increase and banks saw a 2.9% increase. By market segment, new business volume grew 9.3% in the small ticket segment and 3.7% in middle ticket, and declined 1.8% in large ticket.
- From an asset perspective, the top-five most-financed equipment types were internal technology (IT) and related technology services, transportation, construction, agricultural and office machines. The top five end-user industries representing the largest share of new business volume were services, wholesale/retail, transportation, agriculture, and industrial and manufacturing.
- Delinquencies edged up in 2018 to 4.5%, from 4% in 2017. Delinquencies have been on the rise since 2013 when only 1.2% of receivables were over 31 day past due.
- Charge-offs also increased sharply from 0.27% of average receivables in 2017 to 1.14% in 2018.
- Credit approvals increased slightly, and while the percentage of approved applications being booked dropped slightly, there was an increase in total dollars booked.
- Employment levels grew moderately by 2.1%.
PricewaterhouseCoopers LLP administered the 2019 SEFA. The results were compiled from surveys sent to 388 eligible ELFA member companies in the first quarter of 2019. A total of 126 companies submitted 2018 U.S. domestic lease and loan data.
“The equipment finance industry saw positive growth overall in 2018, as reported in the 2019 Survey of Equipment Finance Activity,” said ELFA President and CEO Ralph Petta. “We are pleased to share this important industry data and we are excited to roll out new SEFA offerings this year. In addition to the traditional SEFA report, the Interactive SEFA Dashboard and the personalized MySEFA tool will allow users to crunch the numbers in new ways and make better, more data-driven decisions. We thank all the ELFA member respondents, without whom this leading industry data source would not be possible.”
Access the 2019 SEFA Survey Results
The latest survey data are available in a variety of formats:
- The 2019 SEFA webinar, held on Aug. 6, featuring highlights from the report.
- The 300-page "SEFA Report," the companion “Small-Ticket SEFA Report” and the combined report offer comprehensive performance metrics for 126 equipment finance companies.
- The Interactive SEFA Dashboard is an online dashboard showcases executive summary data from a decade of SEFA reports.
- The MySEFA interactive data tool lets SEFA survey respondents track their own operational and performance statistics and compare them against their peers.
For more information, visit elfaonline.org/SEFA.