Most businesses rely on equipment to operate, and equipment leasing and financing helps all types and sizes of businesses acquire the needed equipment.
Each business has to make its own calculations as to the form of finances they need, based on numerous factors such as cash flow, balance sheet impact, availability of a credit line, and the length of time the equipment will be needed.
ELFA, the Equipment Leasing and Financing Association came out with their May 2015 report about the state of equipment leasing business in the United States, and the projections for the future.
Which industries are financing Equipment?
- Services – such as data processing services, administrative support services, repair services, etc.
- Truck transportation
- Health Services
- Finance/insurance/real estate
- Industrial/manufacturing – metal & machinery
- Mining/oil & gas extraction, pipelines
- Industrial/manufacturing – other
The top 10 equipment types that are financed
- Truck and trailers
- Corporate aircraft
- Computer software
- Office machines
- PCs and workstations
- Computer – other
- Medical imaging, diagnostic, surgical, electronic medical devices
- Computer mainframes and servers
A look at the future:
- It is reported that 7 out of 10 businesses use at least one form of financing to purchase equipment.
- 62 cents of every dollar spent on equipment is financed.
- Total financing reached $922 billion in 2014.
- Equipment finance grew 8% in 2014
- The tendency to finance has grown consistently since 2010.
- 34.6% believe demand for leases and loans will increase over the next 4 months, after it was down from 48.2% in April 2015.
- 53.9 % believe they will hire more employees over the next 4 months, an increase from 51.9% in April.
- 50% indicate that they believe their company will increase spending on business development during the next 6 months.