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Healthcare equipment financing grew in 2008

New business volume for equipment leasing in the health services sector grew from 8.9 percent in 2007 to 9.2 percent in 2008, according to the 2009 Survey of Equipment Finance Activity.

The survey by the Equipment Leasing and Finance Association, which represents the $650 billion equipment finance sector, shows that overall new business volume among a sample of its member companies declined 2.2 percent in 2008.

This compares to a 2 percent increase in 2007 originations among the respondents to the 2008 survey.

"The Survey of Equipment Finance Activity is the broadest compendium of industry data, comprising a representative cross-section of equipment lease and loan origination by product, structure and origination," said ELFA President Kenneth E. Bentsen Jr. "The survey is unique to the ELFA and provides a baseline and benchmark for companies operating in the equipment finance space."

According to the survey, health services is among the top performing categories by end-user industry along with agriculture, forestry and fishing, finance, insurance and real estate and utilities.

New business volume by equipment type grew from 6.3 percent in 2007 to 7.2 percent in 2008 for medical equipment. From an asset perspective, healthcare, along with agriculture, energy, materials handling and office products, enjoyed modest growth.

Survey respondents also reported that profitability is constrained as seen by a weighted average return on equity of 11 percent, a decline from 12 percent in 2007. Return on assets also suffered, falling to 1.2 percent from 1.9 percent during the year-earlier period.

The survey provides quantitative information about the status of the $650 billion equipment finance industry: statistical, financial and operations information for equipment finance organizations for the purposes of data comparison year over year through a voluntary survey of member companies.

In the 2009 SEFA project, 122 reporting entities participated in the survey, as compared to 154 the prior year.
 

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