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Survey of Equipment Finance Activity

BY ALM Staff
July 29, 2010

Like many other sectors of the economy, the equipment leasing and finance industry is still in the process of evaluating the severity of the financial storm weathered over the past few years. As a result, the question was never really if business volume would be off, but more accurately, by how much. The answer, a lot.

The Equipment Leasing and Finance Association (“ELFA”) recently released its 2010 Survey of Equipment Finance Activity (“SEFA”), which shows that new business volume among a sample of the ELFA member companies declined 30.3% in 2009, in contrast with a 2.2% decline in 2008. Pre-tax income and net income, in dollar terms, declined by 55.7% and 54.4%, respectively. Decreases in revenues and total headcount were only 13.8% and 5.8%, respectively.

For the first time in the past 10 years of the SEFA, weighted average return on equity (“ROE”) was in the single digits at 5.2%, a decline from 11% in 2008. Return on assets (“ROA”) declined by half, falling to 0.6% from 1.2% during the year-earlier period.

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