Industry Overview

Equipment Finance: A Dynamic and Growing Sector

Companies that provide the means for equipment acquisition and finance are contributing to the economy through the utilization and investment in capital goods and are the driving force behind the growth in the commercial equipment finance market, contributing to capital formation in the U.S. and abroad.

Equipment finance companies are responsible for financing a substantial portion of the nation's capital expenditure budget through a multitude of financial products and strategies and are engaged in originations and primary and secondary market financing activities.

Economic Contribution of Equipment Finance

Equipment finance facilitates the growth and expansion of the U.S. and global economies by providing multiple financing products for companies to acquire and employ plant, equipment and software, thereby enhancing business investment and capital formation.

Most of the nation's largest financial services companies and manufacturers as well as regional and community banks and independent medium and small finance companies throughout the country comprise the equipment finance sector. This includes global financial and manufacturing companies operating in the U.S. and abroad. The businesses that seek equipment financing as a means of growth -- range from Fortune 100 companies to small and medium sized enterprises to governments and nonprofits.

The equipment finance market comprises financing of business capital expenditures or fixed business investment of tangible goods or personal property (including software). Under existing models established on the basis of leasing, the domestic market has been sized at approximately 27% of fixed business investment (exclusive of software) or $234 billion in 2005. However, the Equipment Leasing and Finance Association, through its foundation, has commissioned a project to develop new statistical and econometric models to encompass the increasing volume of non-lease equipment finance. This study is due for completion in September 2007.

MLFI-25: Monthly Leasing and Finance Index

The Equipment Leasing and Finance Association's (ELFA) Monthly Leasing and Finance Index (MLFI-25) reports on equipment finance activity such as New Business Volume, Aging of Receivables, Net Investment at Risk, Average Losses, Credit Approval Ratios, and Total Number of Employees.

View the MLFI-25

Ask An Expert

Want to know more? Ask an Expert:
Bill Choi bchoi@elfaonline.org 202.238.3413 or
Ralph Petta rpetta@elfaonline.org 202.238.3430