New business volume grew 16.5% in the equipment finance
industry in 2011, according to the 2012 Survey of Equipment
Finance Activity (SEFA) released by the Equipment Leasing and
The growth in volume surpassed the 3.9% increase reported for
2010, marking the second year of growth following a 30.3%
decline in 2009 and a 2.2% decline in 2008.
The SEFA, which is based on responses from 109 ELFA member
companies, covers key statistical, financial and operations
information for the $628 billion equipment finance
The equipment finance industry helps a wide range of
commercial businesses to acquire the equipment they need to
conduct their business operations, said William G.
Sutton, ELFA CEO.
The 2012 SEFA data show the equipment finance sector
continued to gain momentum as the economy improved in 2011.
More recent data collected in 2012 indicate that steady growth
is continuing, even amid a slow economic recovery.
Key findings for 2011 as reported in the 2012 SEFA
Overall new business volume grew 16.5%, a
significant increase over 2010 growth of 3.9%.
All market segments showed growth in volume, except
for the smallest segment. New business volume fell 4.8% for the
micro-ticket segment but grew 15.2% for the small-ticket
segment, 21.8% for the middle-ticket segment and 10.2% for the
By organization type: Independent equipment finance
organizations saw the strongest increase in new business volume
(19.7%, up from 5.2% in 2010), with banks close behind at 19.3%
(up from a 0.9% decrease in 2010). Captives saw their volume
grow by 10.5% (down from 11.3% in 2010).
From an asset perspective, the equipment types that
saw increases in new business volume included agriculture;
computer equipment; construction; furniture, fixtures
and equipment; industrial/manufacturing; materials handling;
printing and transportation. The equipment types that saw new
business volume decline included medical; mining, oil and gas
extraction; office machines; telecommunications and
Delinquencies and full-year losses (charge-offs)
continued to decline. Delinquencies in the overall portfolio
were just 1.4% past due 31 days or more in 2011, the lowest in
at least five years. Delinquencies remained an issue for
certain industries, especially construction and printing.
Charge-offs fell from 1.0% in 2010 to 0.4% in 2011.
Employment levels remained stable, although as
portfolios improved, positions in collections declined and
positions in bookings increased.
Given the current financial markets, cost of funds
declined significantly. Competitive pressure did drive pre-tax
spreads lower in 2011, but still they remained higher than they
were in 2008 and 2007.
Credit approvals increased, as did the percentage
of those approved applications being booked and funded. Over
70% of overall credit applications were approved and just under
50% of submitted applications were booked.
Net income increased overall in both dollar terms
and as a percentage of total revenues. Return on average equity
remained healthy at 15.5%. Return on average assets increased
to 2.0%, returning to levels seen earlier in the decade.