A Deeper Look Into North America’s Asset-Based Financing and Leasing [SPONSORED]
When considering the equipment finance and leasing markets in North America it is tempting to concentrate solely on the US – it is, after all, the dominant global economy and the size of its leasing market is by some way the world’s largest.
The US market continues to lead the way out of recession. Confidence levels among US executives are at their highest for four years and business volumes have maintained their year-on-year upward momentum.
However, the asset finance and leasing market in Canada cannot simply be viewed through the same lens as the US. Although, like the overall economy, it is very closely linked with that of the US and naturally suffered a decline following the financial crisis, this was not as serious as in many markets and the figures below show it recovered strongly.
Canada – recent fall in lending should not mask longer-term positive outlook
The asset-based financing and leasing industry is the largest provider of debt financing to business customers and consumers in Canada after the traditional bank and credit union lenders.
The equipment and auto leasing market in Canada is represented by the Canadian Finance & Leasing Association (CFLA), which has compiled statistics on the activities of its member companies since its inception in 1993. Today, the number of member companies stands at close to 200.
However, recognizing the growing importance of asset-based finance provision by companies and agencies outside its membership, the CFLA has widened its statistical parameters in an attempt to give a more accurate estimate of the overall value of the market.
This has led to a definition of asset-based finance that includes leases, secured loans and lines of credit and conditional sales contracts provided by banks, credit unions, insurance companies, government agencies, captive finance companies, independent finance companies and the vendors themselves.
Material from a variety of sources has been collated for the CFLA by The Centre for Spatial Economics (C4SE) and, combined with data from previous CFLA surveys of member activity, used to generate estimates of asset-based finance new business and the value of assets financed in Canada from 1990 to 2013.
