Colonnade Advisors released a report on the small ticket equipment finance and leasing industry and notes this sector of the commercial finance industry generates over $330 billion in transaction volume annually. The participants in this market are diverse, ranging from major banks to nimble independent firms.

According to the report, go-to-market strategies vary as well – most firms in the sector originate through channel partnerships with equipment manufacturers and vendors, but some firms use direct sales methods or a broker network.

Since the financial crisis and recession of 2008 – 2009, several major non-bank independent equipment finance and leasing firms have prospered as banks withdrew from the marketplace. The demise and dismantling of GE Capital also created major opportunities for non-bank leasing and finance firms. As the recovery gained length and strength, banks became less ambivalent about this segment. M&A transaction activity in the past two years heralds the re-emergence of commercial banks as buyers of small ticket equipment finance and leasing companies. Other non-bank strategic buyers are also active.

Colonnade said the overall M&A market for specialty finance companies remains robust. Investor interest in point-of-sale, tech-enabled business models is quite strong, as demonstrated by the recent initial public offering of GreenSky. The firm expects to see continued high levels of acquisition and capital markets activity in the small ticket equipment finance and leasing sector over the next two years, with momentum sustained by the continuing economic expansion in the U.S.