Recession “more likely than not” in the next 12 to 24 months, ELFF study warns

Equipment finance takes an estimated 50% of the market, valuing it at $900 billion. A record proportion of businesses (79%) relied on financing for at least part of their equipment and software acquisitions, although the overall value of the market declined amid increased use of alternatives among private businesses.

Jeffry D. Elliott (pictured), foundation chairman and senior managing director of Huntington Equipment Finance, said: “The Horizon Report shows that while more businesses than ever are using financing, they aren’t financing as much of their acquisitions as they have in the past. With opportunities for growth in this competitive landscape, Foundation resources like the new Recession Monitor are critical for equipment finance professionals in their portfolio and strategy decision-making.”

Additional findings from the report include:

• Leasing remains in pole position: Overall, 24% of businesses used leasing as a method of acquiring equipment and software last year, making it the most common form of finance. This was followed by lines of credit (16%), secured loans (12%), and other forms of finance (3%).
• Investments are expected to remain steady: 56% of respondents forecast the volume of equipment and software acquisitions to remain steady over the next 12 months, with 22% of end-users expecting volume to increase, and 21% expecting it to decrease. Of those expecting acquisitions to increase, 59% expect to use finance to cover at least a portion of the cost.
• Office equipment is most likely to be financed: An estimated 65% of office equipment acquisition is forecast to be secured through a lease, loan, or line of credit. Other verticals with high finance activity included industrial equipment (59%), agriculture equipment (59%), communications equipment (58%), medical equipment (58%), and automobiles (57%).

The 2019 Equipment Leasing & Finance Horizon Report is available to download for free here.

* Article corrected to refer to Equipment Leasing and Finance Foundation (ELFF) – Dec 16, 2019