ELFA 2022 SEFA Reveals New Business Volume Increased 7.4% in 2021

July 18, 2022, 07:22 AM

Filed Under: Equipment Leasing & Finance Association

Related: Bill Choi, Equipment Leasing & Finance Association, Ralph Petta, SEFA, Survey of Equipment Finance Activity

The equipment finance industry saw new business volume increase 7.4 percent in 2021, according to the 2022 Survey of Equipment Finance Activity (SEFA) released today by the Equipment Leasing and Finance Association (ELFA). This is a marked improvement from a decline of 7 percent in 2020—the first decrease in overall spending on capital equipment in a decade—resulting from the impact of the pandemic. The 2022 SEFA reveals key statistical, financial and operations information for the $900 billion equipment finance industry, based on a comprehensive survey of 100 equipment finance companies.

“We are pleased to share the results of the 2022 Survey of Equipment Finance Activity,” said ELFA President and CEO Ralph Petta. “After averting a worst-case scenario in 2020 with the industry showing only a single-digit decline in year-over-year new business volume, equipment finance companies showed their characteristic resilience coming back stronger than ever in 2021. It’s encouraging that we’re seeing strong portfolio performance again this year despite economic uncertainty.”

“We thank all the ELFA members who participated in the 2022 SEFA to make this comprehensive industry data source possible,” said Bill Choi, ELFA Vice President of Research & Industry Services. “We encourage all members to review the data and put it to work for your business. If you have any questions about benchmarking your company, using our interactive dashboard or other SEFA tools, please don’t hesitate to reach out.”

Survey Highlights

Key findings for 2021 as reported in the 2022 SEFA include:

New business volume was back in positive territory in 2021 after the pandemic broke a 10-year streak of consecutive year-over-year growth in 2020. Among survey respondents nearly 72 percent experienced an increase in volume in 2021.
By organization type, banks saw a 3.6 percent increase in new business volume, captives saw a 14.6 percent increase and independents saw a 16.4 percent increase. By market segment, new business volume dropped 1 percent in the large ticket segment and increased 3.1 percent in middle ticket, while small ticket surged with new business volume growth of 17 percent year over year.
From an asset perspective, the top-five most-financed equipment types were transportation, IT and related technology services, construction, agriculture and industrial/manufacturing. The top five end-user industries representing the largest share of new business volume were services, agriculture, industrial & manufacturing, construction and transportation.
Use of electronic documents continued to gain traction after sharply increasing from 52 percent of respondents in 2019 to 74 percent in 2020. In 2021, the share of respondents who used electronic documents to fund at least some of their new business volume grew to 80 percent.
Delinquencies declined to 1.6 percent overall, from 3.2 percent in 2020, with mining/oil & gas and transportation-railroad continuing to experience the highest delinquency rates.
Charge-offs improved to 0.25 percent of average receivables, compared to 0.43 percent the previous year.
Credit approvals increased year over year, as did the percentage of those approved applications being booked. There was also an increase in both the number of applications and the dollar volume from 2020 to 2021.
Employment increased slightly by 2.2 percent. Independents and captives increased their headcount by 8.7 percent and 4.3 percent respectively, and banks declined marginally by -0.3 percent.
Work location arrangements, a new category added to the SEFA this year, showed that by organization type overall in 2021 work in-office full-time (at least four days a week) decreased to 9 percent of organizations, hybrid work increased to 33.1 percent and working remotely decreased to 57.9 percent.

In addition to the 2022 SEFA, ELFA released the 2022 Small-Ticket SEFA, which focuses on small-ticket and micro-ticket equipment transactions among the SEFA respondents. The report found that new business volume in the small-ticket space increased by 15.3 percent in 2021.

Access the Data

The 2022 SEFA data are available in a variety of formats at www.elfaonline.org/SEFA:

Full SEFA Report: This 300+ page report offers comprehensive performance metrics for 100 equipment finance companies.
Interactive SEFA Dashboard: This online dashboard showcases executive summary data from over 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.

PricewaterhouseCoopers LLP administers the SEFA. The ELFA Research Committee provides support and direction in the development of the survey and the interpretation, analysis and presentation of the results. For more information, contact Bill Choi at bchoi@elfaonline.org.