Equipment Finance Services Market Expected to Reach $3083.8 Billion by 2032—Allied Market Research

According to a new report published by Allied Market Research, titled, “Equipment Finance Services Market, By Type (Equipment Loan, Equipment Lease, and Others), By Provider (Banks, NBFCs, and Others), By Application (Transportation, Aviation, IT and Telecom, Manufacturing, Healthcare, Construction, and Others): Global Opportunity Analysis and Industry Forecast, 2023–2032". The equipment finance services market was valued at $1.2 trillion in 2022, and is estimated to reach $3083.8 billion by 2032, growing at a CAGR of 9.7% from 2023 to 2032.

Equipment financing allows businesses to access the latest technologies and machinery without spending large upfront costs, helping businesses to remain competitive and productive. It also protects cash flow because financing covers the cost over time, thereby freeing up funds for other essential operations. Moreover, equipment financing frequently includes tax breaks, such as deductions and depreciation benefits, which can dramatically lower the total cost of ownership.

Furthermore, this financing method is adaptable and can be adjusted to meet a company's specific requirements, including bespoke repayment terms and structures. This versatility makes it an attractive option for both new and established organizations. In addition, key players in the equipment finance services market adopt various strategies to attract and retain customers, recognizing the importance of providing affordable equipment financing options to individuals, SMEs, trust institutions, and others.

For instance, in February 2024, Fintech firm Credit Fair partnered with Jakson Solar to offer affordable solar equipment financing options to individuals, MSMEs, trust institutions, and housing societies. Credit Fair has set an ambitious target of scaling up its green financing loan portfolio to $48.2 million (Rs 400 crore) and growing its total Assets Under Management (AUM) to $120.4 million (Rs 1,000 crore) by FY25.

The equipment finance services market size is driven by technological advancements such as AI, blockchain, and IoT, which revolutionize the asset management and financing processes, thereby attracting both providers and consumers towards equipment finance solutions. Furthermore, evolving consumer preferences and demands for flexible financing options and value-added services drive providers to adapt their offerings to meet changing market needs, fostering competition and innovation. However, regulatory compliance and economic uncertainties restrain the equipment finance services market growth. On the contrary, the growing equipment finance services market trends towards sustainability and environmental consciousness provide lucrative growth opportunities for equipment finance providers to offer green financing solutions, leading to the rising demand for eco-friendly equipment and practices.

Moreover, partnerships and collaborations across industries enable equipment finance companies to leverage complementary expertise and resources, expanding their market reach and enhancing their service offerings to meet diverse customer needs in the upcoming years. For instance, in April 2022, MidCap Business Credit increased its senior credit facility with Wells Fargo Capital Finance to $200 million. This upsize enables MidCap to support the growth of its existing asset-based lending business and support the launch of its equipment finance vertical, MidCap Equipment Finance, which focuses on providing equipment leases and loans between $2 million and $20 million to middle-market customers in the U.S. and Canada.

By application, the transportation segment acquired a major share in 2022. This is attributed to the increasing global trade and commerce, which drives the expansion and modernization of transportation infrastructure including fleets of trucks, ships, and aircraft. Hence, this fuels the demand for financing solutions to acquire new vehicles and equipment. However, the healthcare segment is expected to be the fastest-growing segment in the equipment finance services market forecast period. This is attributed to the technological advancements in medical equipment, such as advanced imaging systems, robotic surgery systems, and telemedicine solutions, which are driving the demand for equipment upgrades and replacements to enhance patient care and operational efficiency.

Region-wise, North America dominated the equipment finance services market in 2022. This is attributed to the technological advancements that are driving the demand for updated equipment across various industries, necessitating flexible financing options to facilitate equipment acquisition in the region. However, Asia-Pacific is considered to be the fastest-growing region during the forecast period. This is attributed to the rapid industrialization and urbanization in countries such as China, India, and Southeast Asian nations, which is fueling the demand for modern equipment across various sectors, including manufacturing, construction, and infrastructure development.

There are infrastructure-related bills that can drive equipment demand, hence, fueling the growth of the equipment finance services market in the coming years. For instance, in November 2021, the Infrastructure Investment and Jobs Act bipartisan bill was passed to improve infrastructure in the U.S. The funds allocated toward these investments have the potential to result in tremendous increases in equipment leasing for trucks, construction equipment, and freight and passenger rail equipment.

Key Findings of the Study

• By type, the equipment loan segment held the largest equipment finance services market share in 2022.
• By provider, the banks segment held the largest share in the equipment finance services industry in 2022.
• By application, the healthcare segment is expected to show the fastest market growth during the equipment finance services market forecast period.
• Region-wise, North America held the largest market share in 2022. However, Asia-Pacific is expected to witness the highest CAGR during the forecast period.

The key players operating in the equipment finance services market analysis include The PNC Financial Services Group, Inc., Keystone Equipment Finance Corp., JPMorgan Chase & Co., Crest Capital, First-Citizens Bank & Trust Company, OnDeck, Bank of America Corporation, Wells Fargo, Balboa Capital, and Smarter Finance USA. These players have adopted various strategies to increase their market penetration and strengthen their position in the industry.