ELFA 2024 Survey of Equipment Finance Activity Reveals New Business Volume Growth of 1.1% in 2023

The equipment finance industry saw new business volume (NBV) increase 1.1% in 2023, according to the 2024 Survey of Equipment Finance Activity (SEFA) released today by the Equipment Leasing and Finance Association (ELFA). This decrease from NBV growth of 6.3% in 2022 was largely driven by pullback from bank lessors. The 2024 SEFA reveals key statistical, financial and operations information for the $1 trillion equipment finance industry, based on a comprehensive survey of 101 equipment finance companies.

Key findings for 2023 as reported in the 2024 SEFA include:

• By organization type, banks saw a 3.3% decrease in new business volume, while NBV for captives and independents increased by 6.3% and 10.0%, respectively.
• By market segment, NBV rose 8.0% in the large ticket segment and 7.2% in small ticket, while middle ticket decreased 3.6% year over year, reflecting the predominance of banks in this sector.
• From an asset perspective, the top-five most-financed equipment types were transportation, agricultural, construction, IT & related technology services, and industrial & manufacturing. The top five end-user industries representing the largest share of new business volume were services, agriculture, industrial & manufacturing, construction and transportation.
• Delinquencies were 1.4% overall, down from 2.4% in 2022, with mining/oil & gas extraction continuing to experience the highest delinquency rate.
• Charge-offs were 0.26%, up from 0.21% in 2022, and recoveries declined to 0.13% from 0.29% the year prior.
• Credit approvals decreased year over year driven by banks, with declines in the number of credit applications booked and funded, and in dollar volume. In 2023, 77.5% of applications submitted were approved versus 78.5% in 2022. Both captives and independents saw an increase in dollar volume booked and funded.
• Employment levels declined slightly by 0.47%. Banks' headcount remained flat, captives' declined 5.4% and independents' increased 7.6% albeit from a smaller headcount number.

In addition to the 2024 SEFA, ELFA released the 2024 Small-Ticket SEFA, which focuses on small-ticket and micro-ticket equipment transactions among the SEFA respondents. The report found that new business volume in the small-ticket space increased by 2.9% in 2023. Just under 52% of respondents had their volume grow in 2023, down from 64.8% in 2022.

The 2024 SEFA data are available in a variety of formats at www.elfaonline.org/SEFA. PricewaterhouseCoopers LLP administers the SEFA. For more information, contact Bill Choi, ELFA VP of Research and Industry Services, at [email protected].