New business volume grew 4.4 percent 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 percent increase achieved in 2017 but surpassed real 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 percent in 2018.

Survey Highlights
Key findings for 2018 as reported in the 2019 SEFA include:

• New business volume grew 4.4 percent in 2018. By organization type, independents saw a 14.6 percent increase in new business volume, captives saw a 6.1 percent increase and banks saw a 2.9 percent increase. By market segment, new business volume grew 9.3 percent in the small-ticket segment and 3.7 percent in middle ticket and declined 1.8 percent in large ticket.
• From an asset perspective, the top-five most-financed equipment types were 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 percent, from 4 percent in 2017. Delinquencies have been on the rise since 2013 when only 1.2 percent of receivables were over 31 day past due.
• Charge-offs also increased sharply from 0.27 percent of average receivables in 2017 to 1.14 percent 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 percent.

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. Learn at www.elfaonline.org/SEFA:

• Web Seminar: ELFA will host a web seminar on Aug. 6 to report the SEFA results.
• Full SEFA Report: The 300-page SEFA Report and companion Small-Ticket SEFA Report offer comprehensive performance metrics for 126 equipment finance companies.
• Interactive SEFA Dashboard: This online dashboard showcases executive summary data from a decade of SEFA reports.
• MySEFA: This interactive data tool lets SEFA survey respondents track their own operational and performance statistics and compare them against their peers.

Infographics
Download free visualizations of the SEFA, including “Equipment Financing on the Rise,” a snapshot look at key take-aways from the 2019 SEFA, and “Top 6 Ways to Use the SEFA,” featuring tips for leveraging the data effectively, at www.elfaonline.org/SEFA.