2016-07-29 04:28:23
2016 Survey of Equipment Finance Activity finds new business volume grew in 2015
Watch an animated infographic showcasing the 2016 SEFA results at www.elfaonline.org/SEFA.
Don’t miss the 2016 SEFA web seminar on August 17. Learn more at www.elfaonline.org/SEFA.
GROWTH OF NEW BUSINESS VOLUME continued across the equipment finance industry in 2015, according to ELFA’s 2016 Survey of Equipment Finance Activity (SEFA). Overall new business volume climbed 12.4% in 2015, marking the sixth consecutive year that businesses increased their spending on capital equipment. Some 65% of ELFA member companies surveyed reported growth, even as shift s in domestic and global markets produced contrasts and changes from 2014.
The SEFA report covers key statistical, financial and operations information for the $1 trillion equipment finance industry, based on a comprehensive survey of 116 ELFA member companies. The 313- page report, which is produced by PricewaterhouseCoopers, is the most important and comprehensive source of statistical information available on the equipment finance sector.
SURVEY HIGHLIGHTS
Key findings for 2015 as reported in the 2016 SEFA include:
Independents saw a 59.9% increase in new business volume, while banks saw an 11.6% increase and captives saw a 3.3% increase.
New business volume grew 2.8% in the small-ticket segment, while middle-ticket grew 12.4% and large-ticket climbed 33.9%.
The top-five most-financed equipment types were transportation, IT and related technology services, construction, agricultural and medical equipment. The top five end-user industries representing the largest share of new business volume were services, industrial and manufacturing, agriculture, transportation and wholesale/retail.
Cost of funds climbed 17 basis points, due at least in part to the increase in the Federal Reserve discount rate in late 2015. This was the Fed's first increase since 2007, and it translated into increased downward pressure on pre-tax spreads.
Assets under management climbed 10% in 2015, while return on assets declined slightly to 1.5%.
Net income increased 1.2%. Return on average equity decreased slightly but remained strong at 16.1%.
Overall, delinquencies remained steady, with less than 2% of receivables over 31 days past due. Net full-year losses or charge offs increased slightly but remained at 0.2% of average receivables.
Credit Approvals decreased slightly while the percentage of approved applications that were booked and funded edged up.
Employment levels grew moderately by 6.8%, with headcount in sales and marketing functions increasing at a similar level. As expected, there was a significant increase in headcount associated with compliance.
A companion report to the 2016 SEFA called the 2016 Small-Ticket Survey of Equipment Finance Activity, which focuses on smallticket and micro-ticket equipment transactions among the SEFA respondents, found that new business volume in the small-ticket space grew by just 0.4% in 2015.
GET YOUR COPY
Participation in the SEFA is a benefit of membership in ELFA. Member-respondents receive a complimentary copy of the Survey Report, as well as confidential Individual Company Data Sheets. Others may purchase the Survey Report; members save 46%! Learn more at www.elfaonline.org/SEFA.
WHAT MEMBERS ARE SAYING
“ The SEFA has become the most important source of data in our industry. Over the years it has evolved into 300 pages of very granular information that can help you compare your performance, understand trends and find new markets.” –Raymond James, Chair, ELFA Research Committee
Read tips from members for getting the most out of the 2016 SEFA report at www.elfaonline.org/SEFA.
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Big Data
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