Equipment Finance Sector To Surpass $740B In 2013
U.S. businesses and government agencies will finance more than $742 billion in equipment acquisitions in 2013, according to the U.S. Equipment Finance Market Study 2012-2013, released by the Equipment Leasing & Finance Foundation. 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.
However, equipment finance volumes are expected to expand at a more moderate pace over the next 12 to 18 months as equipment investment growth remains constrained by uncertainties at home and abroad. Companies are expected to remain cautious about taking on the risks associated with large capital investments until after important tax and regulatory decisions impacting short- and long-term fiscal stability have been made.
Some Highlights From The U.S. Equipment Finance Market Study 2012-2013:
- In 2012, equipment finance volume returned to pre-recession levels, with the 2012 estimate for the equipment finance market expected to reach $725 billion. The market is expected to expand over the next two years; however, the growth rate is expected to slow.
- The equipment finance sector is a significant contributor to capital formation in the U.S. economy. Of the projected $1.3 trillion invested in plant, equipment and software in 2013, 55%, or $742 billion, of that investment is expected to be financed through loans, leases and lines of credit. In 2014, the market size is projected to grow to $778 billion.
- Seventy-two percent of companies use some form of financing when acquiring equipment, including loans, leases and lines of credit (excluding credit cards). Companies with less than $1 million in revenues use financing in 49% of their equipment acquisitions, while companies with revenues between $25 million and $100 million use financing in 86% of their acquisitions.
How To Access The Study: The executive summary and fact sheet are available for free download at bit.ly/EquipMktStudy.