Equipment Finance Sector to Surpass $740 Billion in 2013
Well this is great news! As seen on NBC News, a survey was conducted by IHS Global Insight and released by Equipment Leasing & Finance Foundation showing U.S. businesses and agencies will finance more than $742 billion in equipment acquisitions in 2013.
According to the study, the equipment finance sector has emerged from the Great Recession with finance volumes at an all-time high, as a result of double-digit growth in equipment investment and a favorable interest rate environment.
- Seventy-two percent of companies use some form of financing when acquiring equipment using at least one form of financing (excluding credit cards).
- Cash as a method of purchasing declined for large companies from 2007 to 2012 as larger companies enjoyed greater access to credit markets. In the current low-interest-rate environment, financing equipment acquisitions is especially attractive.
- Even with the relatively high degree of uncertainty over the economy and regulations/fiscal policy, nearly 30% of companies surveyed anticipated increasing their equipment investment over the next 12 months.
- Companies with sales between $25 million and $100 million doubled their share of financing volume from 2006 - when the Foundation's first market-sizing study was conducted - to 2011. Companies with fewer than 51 employees also doubled their share equipment acquisition via financing in this time period. This may be in part a reflection of the difficulty in obtaining other forms of credit for these segments of the market!
"Equipment financing plays a significant role in helping businesses acquire the equipment they need," said William G. Sutton, CAE, President of the Equipment Leasing & Financing Foundation. "The equipment finance sector not only contributes to businesses' success , but to U.S. economic growth, manufacturing and jobs.
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