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Equipment Leasing Association Annual Survey Shows Leasing Remains Popular Growth in New Business Volume, Profitability Remains Strong Arlington, Virginia—The Equipment Leasing Association's (ELA) 2005 Survey of Industry Activity (SIA) report results, released today, reveal that leasing remains a prevalent financing vehicle for businesses acquiring equipment. Survey results show new business volume in 2004 was over $105.2 billion, which is an increase of 11.7 percent over 2003 findings - an important measure of leasing's growth. Leasing industry member respondents also report that profitability remains strong as seen by an average return on equity (ROE) and return on assets (ROA), of 13.3 percent and 1.7 percent respectively. ROE declined slightly compared to 2003 but remained above 2002 levels. “The annual survey shows that companies are using leasing as much as ever,” said ELA president Michael Fleming. “Lessors continue to do well, because business leaders see the value and flexibility of leasing over other methods of financing equipment and are utilizing all that leasing companies have to offer.” Fleming added, “More smaller businesses seem to be making leasing part of their equipment financing strategies, as well. The study shows that, while larger members still dominate the market, smaller leasing companies specializing in micro-ticket transactions experienced the strongest growth.” Other 2005 key SIA findings show how lessors continue to offer value to the business community: Strong Credit Management. 98.1 percent of average receivables were current (less than 30 days past due) – a good increase over last year's 96.4 percent figure; of the total receivables, 0.8 percent were more than 90 days past due, a decrease over last year's 1.6 percent. Performance. Lessors report that their average charge-off was 1.5 percent in 2004, a slight increase over 2003 when charge-offs were 1.3 percent. Jobs Creation. The total number of full-time equivalent employees (FTEs) was reported as 21,804 by respondents; this is a slight increase of 0.4 percent from last year's employee total being 21, 711. Growth Industries. From the equipment perspective, there was a strong up tick in construction and truck transportation. Profitability. Pre-tax yield increased very slightly to 6.8 percent in 2004. At the same time, the cost of funds grew to 3.03 percent. Use of Technology. 16.6 percent of new business volume was booked online in 2004, an increase from 13.4 percent in 2003 for the same group of respondents. A separate annual study* produced by Global Insight further affirms leasing's impact on the economy and jobs. That study showed that, over the 1997-2004 period, equipment leasing: Produced between $75 billion and $290 billion additional real GDP. Produced between $200 billion and $225 billion additional real equipment investment. Created between 3 million and 6 million additional jobs. About the 2005 Survey of Industry Activity The ELA 2005 Survey of Industry Activity results were compiled from surveys sent to ELA members, of which 130 companies submitted data for the survey. 79.9 percent of the 2005 respondents also submitted a response to the 2004 survey, showing an increase in participation. And, all of the largest 10 U.S. leasing and finance organizations that are members of ELA participated in the Survey. Total survey respondents, in the aggregate have 85 to 90 percent of marketshare. PricewaterhouseCoopers LLP managed the 2005 Survey for the ELA, ensuring confidentiality, integrity and quality of the submitted data and results. Equipment types financed by leasing, as explored in the survey, include agriculture, aircraft, construction, computers, telecommunications, railroad, printing, medical, industrial, trucks and trailers and more. Type of financing offered by the leasing companies include tax-oriented finance leasing, short-term operating leases, leveraged leases, conditional sales agreements, off-balance sheet loans and tax-exempt leasing. Leasing industry members and other interested parties may obtain a full copy of the ELA Survey of Industry Activity, Equipment Leasing and Finance Organizations, 2005, through the ELA online store at www.ELAOnline.com/store. Members of the accredited media may obtain a full copy of the ELA Survey by contacting Suzanne Jackson at 434-972-7278 or sj@FourLeafPR.com. In addition to the SIA, ELA provides a variety of data, including customized market analyses, to ELA members and organizations involved in the forecasted $248 billion equipment leasing industry. To access this and other industry information, visit the ELA website at http://www.elaonline.com/IndustryData/ or contact Dean Frutiger at (703) 516-8380. For more information on ELA visit http://www.ELAOnline.com. For more information on leasing, check out ELA's informational portal for financial decision-makers at http://www.ChooseLeasing.org, which hosts a directory of leasing companies, a list of 10 questions to ask before signing a lease, a glossary of terms and more. *The Economic Contribution of the Equipment Leasing Industry to the U.S. Economy, produced by Global Insight. About ELA Organized in 1961, the Equipment Leasing Association (ELA) is the premier non-profit association representing companies involved in the dynamic equipment leasing and finance industry to the business community, government and media. As the voice of the leasing industry, ELA promotes the forecasted $248 billion industry as a major source of funds for capital investment in the United States and abroad. Headquartered in Arlington, Va., ELA has more than 750 member companies and a staff of 25 professionals. For more information on ELA, please visit www.ELAOnline.com. Contacts: |
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