SER’S SNAPSHOT OF AUSTRALIA’S EQUIPMENT FINANCE INDUSTRY
Dave Leabeater, 21 March 2017
Equipment finance in Australia is a $42.1 bn industry
Andrew Palmer and Dave Leabeater will be at ITEX 2017 in mid-April and while they will be presented with new ideas and concepts from a U.S. perspective, we thought it would be a good idea to reflect on the state of the Australian equipment finance market.
The US Equipment Leasing and Finance Association (ELFA) regularly publishes a quarterly update on the US market, and their figures predicted US$1.6 trillion was invested in plant, equipment and software in the country last year.
Our Australian counterpart, the Australian Equipment Lessors Association (AELA) publishes similar reports which we have summarised below. Of course our local market is tiny compared to that of the US, however there are some similar trends.
Equipment Finance Asset: Classes and State breakdowns
AELA statistics break-down the broad asset classes for the general equipment finance business (ie. excluding fleet leasing); within the total portfolio, cars and light commercials account for 40%; trucks and buses for 17%; mining, earthmoving and construction equipment for 13%; agricultural equipment for 6%: manufacturing 4% and EDP/office machines for 4%.
NSW/ACT accounts for 33% of general equipment finance by state. Victoria/Tasmania (27%) and Queensland (22%) when combined with NSW/ACT make up more than 80% of total business across Australia.
New business volumes exhibited consistent improvement between 2009 and 2015, with consistent growth in all years except 2013. Current Equipment Finance volume is $37.9 billion per annum (2015). Finance Lease, Operating Lease, and Hire Purchase makes up 33% of the total equipment finance industry, with Chattel Mortgage making up the bulk of the market with 66%.
Where to from here?
International Markets have been significantly disrupted over the past 12 months, with events such as Brexit and the US Political Election causing the world to pause for breath. Australia appears to have handled those headwinds very calmly.
S.E. Rentals has enjoyed a strong start to 2017. During January and February, new business applications have increased by 39% in comparison to the same period last year. Given SER has been around for a while, we are very proud of this growth, however we are always focused on developing better finance solutions for our vendor partners in the future.
The majority of our vendor partners are optimistic about the months ahead. We hope that your business has also started the new year with momentum. We would love the opportunity to discuss the biggest challenges that your business may be facing, and how we can work together to solve these challenges and build sustained growth.
National Sales Manager, S.E. Rentals
S.E. Rentals are the finance as a service specialists that will help you grow your business by providing finance solutions in an 'all things technology' future. We provide you with the flexibility, scalability and agility to help you achieve your Managed Service objectives, and our unique in-house software platform, Finance Oxygen, automates the process for you