Overall new business volume (NBV) growth in the $1.3 trillion equipment finance industry increased from 1.1% in 2023 to 3.1% in 2024, according to the 2025 Survey of Equipment Finance Activity (SEFA) released by the Equipment Leasing and Finance Association (ELFA).
“The 2025 Survey of Equipment Finance Activity shows a year of modest overall growth for the equipment finance industry despite persistent economic pressures and evolving credit conditions,” Leigh Lytle, president and CEO of ELFA, said. “The data and analysis in this comprehensive resource empower industry stakeholders to benchmark performance, assess market dynamics and chart a path forward in an increasingly competitive and dynamic environment. I encourage businesses to use the report and put the data to work for your success.”
Survey Highlights: Key 2024 Findings
The 2025 SEFA revealed several important trends from 2024:
- New business volume at equipment finance companies kept pace at about the same rate as the U.S. economy’s overall inflation rate of 2.9%. Just over half (50.5%) of surveyed companies reported an increase in volume in 2024.
- Portfolios remained healthy with delinquencies still low with 98.7% of portfolios reporting as current and non-accrual assets in line with recent prior reporting periods. However, there are signs of deterioration in overall charge-off (loss) data: gross charge-offs rose to 60 basis points (bps) in 2024, the highest reported since 2018 at 128 bps. Although net full-year losses as a percentage of average receivables remain low, they are on the rise. Recoveries were comparable to the prior year at roughly 14 bps.
- Credit is tightening with declining approval and booking rates signaling more cautious underwriting and tighter credit standards.
- Profitability pressures Intensified as a 13% rise in lease and loan revenue was offset by a 33% increase in interest expense—a nearly 50% increase in bad debt provisions—and 12.7% higher total expenses, driving a 14.5% drop in pre-tax income.
- Spreads were relatively flat at 2.59% as pre-tax yields rose slightly to 7.40% and cost of funds decreased by 5 bps to 4.81%.
- By organization type, banks saw a 1.3% NBV decrease, captives’ NBV grew by 5.9%, and independents, representing a much smaller group, saw a 17.7% increase. By market segment, NBV rose 6.2% year over year in the small ticket segment, 2.5% for middle ticket and 1.4% for large ticket.
- From an asset perspective, the top five most-financed equipment types were transportation, agricultural, construction, IT & related technology services, and materials handling. The top five end-user industries representing the largest share of new business volume were agriculture, construction, wholesale/retail, other services (including real estate leasing, professional services, repair services, etc.) and health services.
- Return on Average Assets (ROA) declined to 1.1% in 2024 (from 1.7% in 2023), while Return on Average Equity (ROE) declined sharply to 7.9% in 2024 (from 11.1% in 2023).
- Employment levels declined by 2.48% in 2024 compared to 2023. Both banks and captives had their headcount decrease by 3.7% and 4.7%, respectively. Independents increased their headcount by 4.3%.
- Functions with the highest implementation rates of artificial intelligence (AI) are sales and credit underwriting, both at 45%. Most respondents are exploring AI for documentation (71%) and underwriting (65%).
In conjunction with the 2025 SEFA, ELFA also released the 2025 Small-Ticket SEFA, a report focused on small-ticket and micro-ticket equipment transactions among SEFA respondents. The companion report found that new business volume in the small-ticket space increased by 1.9% in 2024.
