New Data Reveal Market Insights

2021 Survey of Equipment Finance Activity shows industry resilience

Equipment finance companies’ worst fears failed to materialize in 2020 despite a pandemic that gripped the world and transformed businesses. According to ELFA’s 2021 Survey of Equipment Finance Activity (SEFA), New Business Volume (NBV) fell 7.0%, but this was less than the double-digit drop widely expected.

The 2021 SEFA report covers key statistical, financial and operations information for the nearly $1 trillion equipment finance industry, based on a survey of 104 ELFA member companies. The 300-page report, which is produced by PricewaterhouseCoopers, offers comprehensive performance metrics—including volume size, organization type, market segment and business model—as well as productivity measures—including residual experience, balance sheet data, financial ratios, profitability data and more. 

Highlights

Key findings for 2020 as reported in the 2021 SEFA include:

• Overall, just 52% of respondents’  volume declined in 2020. By ticket  size, the Large-Ticket segment experienced a double-digit decline of -14.7% in NBV, with the Middle-Ticket segment close behind with a - 9.2% decline. Small-Ticket maintained NBV levels from 2019. 
  
  
• By sector, Banks suffered the greatest loss in NBV in 2020. At -10.3%, the decline nearly neutralized the sector’s +12.8% growth of 2019 and resulted in lost market share as well. Captives turned in a strong performance against the pandemic in 2020, with their NBV declining just -1.6%. Independents fared best with NBV in 2020, growing +2.5%.
  
  
• From an asset perspective, end-user industries leading overall growth were Agriculture, Educational Services and Federal Government. Equipment types generating the most growth were Agriculture, Corporate Aircraft and Office Furniture and Equipment.
  
  
• Most notable in major findings for 2020 were delinquencies, which rose just 30 basis points overall to 2.3%. Mining/Oil & Gas and Industrial Manufacturing-Other had the highest delinquency rates. Defined as receivables over 30 days past due, delinquencies were held in check by deferrals as companies contacted customers early in the pandemic and devised individual deferral plans as needed. In total, companies approved nearly $19 billion, or 7.4% of overall portfolio, in COVID-related deferrals. Customers accepted nearly $18 billion of that amount, or 7% of portfolio. 
  
  
• Net Full-Year Losses inched up to 0.48% of average receivables. Overall, however, the industry drew a collective sigh of relief. As one ELFA member observed, “It was a rough year, but deals still got done.”

Access the Data 

Members can tap into three different SEFA resources to get the data you need:

Full SEFA Report – A 300-page PDF document that offers comprehensive performance metrics for 100+ equipment finance companies. The companion Small-Ticket SEFA Report delves into small-ticket portfolios. 

Interactive SEFA Dashboard – A powerful online dashboard that showcases executive summary data from a decade of SEFA reports. Drill down into the data you care about – in just a few clicks. Free and available to all ELFA members.

MySEFA – A personalized data tool that lets SEFA survey respondents track their own operational and performance statistics and compare them against their peers. Only available to companies that participate in the SEFA.

Member-respondents receive a complimentary copy of the survey report, as well as a confidential and interactive MySEFA dashboard report. Others may purchase the SEFA. Learn more at www.elfaonline.org/SEFA.