New business volume up 6.9%

New business volume in the equipment finance industry was up 6.9% in 2017, according to the 2018 Survey of Equipment Finance Activity (SEFA) released by the Equipment Leasing and Finance Association (ELFA), which says this is the eighth consecutive year that businesses increased their spending on capital equipment.

A companion report, the 2018 Small-Ticket Survey of Equipment Finance Activity found that new business volume at the lower end of the scale increased by 3.6% in 2017.

SEFA’s findings show captives and independents saw a 10% increase in new business volume, while banks saw a 5% increase. By market segment, new business volume grew 9.7% in the middle ticket segment, 4.3% in small ticket and 2.8% in large ticket.

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, agriculture, wholesale/retail, industrial and manufacturing and transportation.

Delinquencies increased slightly, with 2% of receivables over 31 days past due compared to 1.8% the previous year. While delinquencies are still very low, they have been on the rise since 2013 when only 1.2% of receivables were over 31 days past due.

Charge-offs also increased slightly but remained at 0.33% of average receivables; any level lower than 1% is considered very low. Credit approvals decreased slightly while the percentage of approved applications being booked and funded increased. Employment levels grew moderately by 3.4%.

PricewaterhouseCoopers administered the 2018 SEFA. The results were compiled from surveys sent to 375 eligible ELFA member companies in the first quarter of 2018. A total of 114 companies submitted 2017 U.S. domestic lease and loan data.

For more information, go to www.elfaonline.org/SEFA.