Equipment leasing companies show robust growth

ARLINGTON, VA-Based on the volume of new business, a composite of equipment leasing companies grew 20 percent in 1998 to $126.1 billion, according to the Equipment Leasing Association (ELA). The information is part of ELAs 1999 Survey of Industry Activity, which provides a comprehensive look at the $183 billion leasing industry and tracks major performance measures for leasing operations.

Bank lessors experienced the largest growth in 1998 with a 35.8 percent increase in new business volume. independent leasing companies reported a 17.7 percent increase, while captive leasing companies showed a 10.5 percent increase in new business volume.

"The survey provides convincing evidence that leasing continues to be an attractive financing tool that enables businesses of all types to acquire the equipment necessary to compete in the strong U.S. economy," said Michael Fleming, ELA president.

Survey highlights include:

* Most new business was conducted in the middle market, i.e., individual transactions in the $250,000 to $5 million range;

* Transportation equipmentaircraft, vessels, railcars, trucks/trailers, and buses/motor coaches-represented the largest share of new leasing business volume at roughly 38 percent; information technology equipment was second at nearly 19 percent;

* Leasing company profitability is stable. The average return on assets was 1.4 percent and the average return on equity was 12.5 percent; and

* Credit quality remains strong; 98 percent of receivables were less than 30 days overdue.

This year, 161 equipment leasing and finance companies participated in the survey. The data is analyzed and presented by market segment (ticket size) and type of respondent organization (bank, independent, captive). Much of the information is broken into specific industry sectors, from agricultural and construction to computers and transportation.

For more information on the Survey of Industry Activity, contact Janet Fianko at 703-527-8655 or visit the EIA website at www.elaonline.com and look in the INFO section under ELA Products.