ELFA Survey reports overall new business volume grew 6.7%.

Press Release Summary:



According to ELFA's 2015 Survey of Equipment Finance Activity, new business volume grew 6.7% in the equipment finance industry in 2014. Rise in new business volume marked the fifth consecutive year that businesses increased their spending on capital equipment. Assets under management grew 8.6%, and return on assets remained steady at a healthy 1.7%, unchanged since 2012. Net income increased 15.2%, and return on average equity decreased slightly, but remained strong at 16.6%.



Original Press Release:



ELFA Survey of Equipment Finance Activity Reports Overall New Business Volume Grew 6.7% in 2014



Web seminar on Aug. 5 will highlight findings from the 40th anniversary report



Washington, D.C., — New business volume grew 6.7% in the equipment finance industry in 2014, according to the 2015 Survey of Equipment Finance Activity (SEFA) released today by the Equipment Leasing and Finance Association (ELFA). The rise in new business volume marked the fifth consecutive year that businesses increased their spending on capital equipment. The SEFA report, now celebrating its 40th year, covers key statistical, financial and operations information for the $903 billion equipment finance industry, based on a comprehensive survey of 100 ELFA member companies. The report, which includes an expanded executive summary, is available at www.elfaonline.org/SEFA. ELFA will host a web seminar on the SEFA findings on August 5. 



ELFA also released a companion report to the 2015 SEFA called the 2015 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 7.1% in 2014.



“We are pleased to present the 2015 Survey of Equipment Finance Activity. This year marks the 40th anniversary of the report, which has grown over the years into the most important source of statistical information available on the $903 billion equipment finance industry,” said William G. Sutton, CAE, ELFA President and CEO. “The data show that the equipment finance industry is healthy and growing, continuing an upward trend since the end of the Great Recession. More recent data collected in 2015 indicate that positive momentum is continuing, with member companies reporting solid new business growth and portfolio performance. We remain cautiously optimistic that demand for capital equipment will continue to drive positive growth for the equipment finance industry.”



Survey highlights:

Key findings for 2014 as reported in the 2015 SEFA include:



•Â  Overall new business volume grew 6.7%.

--  Positive trend: In 2014, the 6.7% growth rate was lower than the previous three years, but it still surpassed the 2.4% rate of growth for the U.S. economy.  New business volume increased for the fifth year in a row, following increases of 9.3% in 2013, 16.4% in 2012, 16.5% in 2011 and 3.9% in 2010, and a decline of 30.3% in 2009.

--  By organization type: Independent equipment finance organizations led the industry in new business volume growth for a third straight year. Independents saw a 17.6% increase in new business volume, while banks saw their volume grow by 7.4% and captives saw a 1.3% increase.

--  By market segment: New business volume varied by market segment, growing  9% in the small-ticket segment and 7.9% in the middle-ticket segment, and falling 2.4% in the large-ticket segment.



•Â  From an asset perspective, the top-five most-financed equipment types were transportation, IT and related technology services, agricultural, construction and industrial/manufacturing equipment. The top five end-user industries representing the largest share of new business volume were services, agriculture, industrial/manufacturing, transportation and wholesale/retail.



•Â  Overall, cost of funds increased slightly. Competitive pressure continued to drive pre-tax spreads down in 2014 to 2.8%, its lowest level in five years.



•Â  Assets under management grew 8.6%. Return on assets remained steady at a healthy 1.7%, unchanged since 2012.



•Â  Net income increased 15.2%. Return on average equity decreased slightly, but remained strong at 16.6%.



•Â  Overall, delinquencies remained steady. Full-year losses or charge-offs fell close to 0.0% overall.



•Â  Credit approvals decreased slightly while the percentage of approved applications being booked and funded remained steady.



•Â  Employment levels grew moderately by 1.7%, with headcount in sales and marketing increasing and servicing declining slightly. There was a significant increase in headcount associated with compliance.



•Â  Electronic documents: For the first time, the SEFA asked respondents about their use of electronic documents for funding new business volume. A total of 70% reported some use of electronic documents.



In honor of the 40th anniversary of the SEFA, ELFA will host a one-hour web seminar on August 5 at noon EDT to report the survey results. See details at www.elfaonline.org/SEFA. 



Videos

An animated infographic summarizing key findings from the 2015 SEFA and a brief video interview about the report with ELFA President and CEO William G. Sutton, CAE, are both available www.elfaonline.org/SEFA.



About the 2015 SEFA

The SEFA is the broadest compendium of data on the equipment finance industry, comprising a representative cross-section of equipment lease and loan origination by product, structure and origination. The report provides a baseline and benchmark for companies operating in the equipment finance space through a voluntary survey of ELFA member companies.



PricewaterhouseCoopers LLP administered the 2015 SEFA. The results were compiled from surveys sent to 351 eligible ELFA member companies in the first quarter of 2015. A total of 100 companies submitted 2014 U.S. domestic lease and loan data. The respondents include eight ELFA members in the 2014 Monitor Top 10 list of the largest U.S. equipment finance organizations and 57 ELFA members in the 2014 Monitor Top 100.



The data are presented by organization type (bank, captive, independent); market segment (small-ticket, middle-ticket, large-ticket); organization size (under $50 million, $50-$250 million, $250 million-$1 billion, over $1 billion); and origination business model (direct, captive, vendor, third-party, mixed). For most categories, data is reported for the past two fiscal years, 2014 and 2013.



Equipment types financed, as explored in the survey, include agriculture, aircraft, construction, computers, office machines, telecommunications, rolling stock, printing, medical, industrial, trucks and trailers and other equipment types. Types of financing offered by the equipment finance companies include tax oriented leases & term loans, non tax oriented leases & term loans, off-balance sheet loans (synthetic leases), tax-exempt leases & loans (municipal and other transactions exempt from income tax) and others, including leveraged leases, discounted payment streams, revolving debt, equity and other investments.



In the fall of 2015, the Equipment Leasing & Finance Foundation will release the 2015 State of the Equipment Finance Industry Report, which provides an in-depth analysis of the SEFA.



About the 2015 Small-Ticket SEFA

The Small-Ticket SEFA is a companion report to the SEFA that focuses on respondents’ small-ticket portfolios, including both micro-ticket (up to $25,000) and small-ticket ($25,000 to $250,000) transactions. Respondents were asked a separate set of questions pertaining only to their small-ticket operations, and the data are compiled in the companion report.



How to Access the SEFA

Participation in the SEFA is a benefit of membership in ELFA. Member-respondents receive a complimentary copy of the survey report, as well as confidential individual company data sheets, which show the individual company’s statistics ranked against a peer group. Non-respondents may purchase the 2015 SEFA and the 2015 Small-Ticket SEFA from www.elfaonline.org/SEFA.  Members of the press may request a copy by contacting Amy Vogt at avogt@elfaonline.org.



About ELFA

The Equipment Leasing and Finance Association (ELFA) is the trade association that represents companies in the $903 billion equipment finance sector, which includes financial services companies and manufacturers engaged in financing capital goods. ELFA members are the driving force behind the growth in the commercial equipment finance market and contribute to capital formation in the U.S. and abroad. Its 580 members include independent and captive leasing and finance companies, banks, financial services corporations, broker/packagers and investment banks, as well as manufacturers and service providers. For more information, please visit www.elfaonline.org.



ELFA is the premier source for statistics and analyses concerning the equipment finance sector. Please visit www.elfaonline.org/data/ for additional information.



Contact Name: Amy Vogt

E-mail: avogt@elfaonline.org

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