<Small ticket equipment leasing business.
1. Is $5 million of new leases each year reasonable?
This would appear to depend on the type of equipment leased.
According to the 1997 economic census there were 154 commercial &
industrial machinery & equipment lessors in Minnesota with total
revenue of $464,822,000. Average revenue was approximately $3
In the office machinery & equipment rental & leasing segment there
were 29 lessors with revenue of $219,503,000. Average revenue was
approximately $7.56 million. Source: 1997 Economic Census
In the St Paul area there were 120 operators with total revenue of
$432,820,000. Average revenue was approximately $3.6 million.
In the office machinery & equipment rental & leasing segment there
were 24 operators with total revenue of $219,025,000. Average revenue
was $9.12 million.
By 2002 the number of business increased. The 2002 census only gives
figures for the US as a whole. In 2002 there were 14,135
establishments compared to 11998 in 1997. 2002 revenue was
$36,548,378,000 compared to $29,150,107,000 in 1997.
Average revenue in 2002 was $2.58, compared to $2.42 million in 1997.
For computer leasing the average revenue in 1997 was $6.07 million and
$5.63 million in 2002.
Source:2002 Economic Census
2. Is their approach different from other leasing companies?
3. Can the business grow?
4. Comparison to other leasing services.
Case study ? Marlin Leasing.
Marlin leasing is a small ticket equipment leasing company that has
grown revenue from $23.7 million in 2000 to $75.6 million in 2004. The
company was founded in June 1997. They have a network of 10,000
origination sources. Their strategy is built around the premise that
convenience, speed and high quality service are what customers want.
Source: 2004Annual Report
Marlin Leasing grew1,846%, 1998-2002. Applications are approved within
two hours and their interest rates either meet or beat those of banks
and credit cards. According to founder and CEO, Daniel Dyer, hiring
and retaining high-quality sales people is the key. Employees are
offered special bonus plans, picnics, holiday parties and weekly and
monthly sales contests.
Marlin Leasing ? company website
2004 sales $75.6 million
1-year sales growth ? 25.2%
2004 net income - $13.5 million
1-year net income growth ? 321.9%
Employees ? 273
1-year employee growth ? 15.2%
GE Commercial Finance
Marlin Business Services Corp.
Nationwide provider of equipment financing solutions in the small ticket segment.
Future growth from the online market.
Marlin Leasing has teamed up CapitalStream to provide online leasing.
with Marlin leasing completes1,000 transactions a week ranging from
$1,000 to $150,000. Source: CapitalStream.
In contrast to Marlin, Winmark has seen a drop in revenue:
2004 ? $26.6 million
2003 ? $30.6 million
2002 ? $33.4 million
2001 - $36.08 million
5. The market for equipment leasing.
According to Business Information Research Services (BIRS), the US
leasing market is worth $235 billion. They predict that the small
ticket market will see the biggest expansion.
Source: BIRS Study No. 163. Price $3,000.
This report gives details of who leases, what they lease and industry
issues. The global equipment leasing market is approximately $600-
$700 billion annually. The US market - $220 billion annually.
The small ticket market accounts for 29% of new business volume.
(Note: you need to keep clicking on the page to read the entire report.)
US market - $200 billion annually. 8 out of 10 US businesses lease
some or all of their equipment. Source: National Arbitration Forum.
2005 State of the Industry Report
This report from the Equipment Leasing and Finance Foundation costs $200
Small ticket new business volume
2002 - $32.8 billion
2003 - $32.8 billion
Percentage of new business volume by origination channel in 2003
Direct ? 53%
Captive programs ? 26%
Vendor programs ? 14%
3rd parties ? 7%
Small ticket 2001 report
According to this report, the small-ticket segment appears both
profitable and attractive. Representing 18% of all new 1999 business
volume, the ROE for the average small-ticket lease is 13.5%. ROA
equals 1.4%, and pretax income as a percentage of total revenue totals
Significant barriers face lessors considering entry to this market.
With the $44,692 average size of a small-ticket application submitted
versus $437,762 in the middle-market segment, lower per-transaction
revenue demands high-tech/low-touch processing. Once the
infrastructure is built, the challenge is to continuously develop
partnerships with manufacturers, vendors, or distribution channels
that can provide deal flow. Economies of scale must be achieved,
driven by standardization of documentation and structure.
Losses are also an issue. Small-ticket leasing results in 4.6% of the
total portfolio receivables classified as older than 30 days.
Furthermore, respondents report 1.4% of the total receivables balance
is charged off.
Risks include economic downturn, poor credit quality due to overuse of
credit scoring and increased use of credit cards for business
payments. Source: FIC.
MarketResearch.com produces a number of reports on the equipment leasing market.
The Perfect Dawn? A Forecast for Small Ticket Leasing
According to this report there was an economic upturn in 2003 in the
small ticket market. Small ticket transactions drove new business
volume in 2002, generating 37.4% of total new business volume. Source:
The Equipment Leasing Association(ELA) is a non-profit organisation
representing companies involved in the industry.
According to ELA?s Monthly leasing index for December 2005,
respondents reported $7.7 billion in new business volume for equipment
leases and loans originated during the period. This total represents a
major increase over November?s $3.9 billion.
The equipment leasing business is highly fragmented with 120 companies
operating in the St Paul area.
A search on Hoover?s found the following equipment leasing companies
in Minnesota. Hoover?s offers a range of reports on these companies.
For example to view financial details costs $9.99.
M&E Equipment Leasing Co 2508 Hillview Rd, Saint Paul, MN
D H Equipment Leasing Co
2100 40th Ave Ne, Minneapolis, MN D & D Equipment Leasing LLC
4230 Pine Bend Trl, Rosemount, MN
TFC Equipment Leasing 2 Appletree Square, Minneapolis, MN
New Vision Equipment Leasing
American Equipment Leasing 11 LLC 550 Cleveland Ave N, Saint Paul, MN
North Central Equipment & Leasing Co 14325 Flagstaff Ave, Saint Paul, MN
CW Equipment Leasing LLc
Ace Equipment Leasing LLC
Tri Equipment Leasing Inc
CPE Equipment Leasing INC
Matthews Equipment Leasing Inc 316 Goodhue Ave, Saint Paul, MN
Harmony Equipment leasing
CPT Equipment leasing LLC 1549 Minnehaha Ave W, Saint Paul, MN
Vesta Equipment Leasing INC
Utility Equipment leasing 100 9th Ave Sw Ste 101, Saint Paul, MN
Signature Equipment Leasing LLC
Arlington Equipment Leasing Corporation
Kaffee Equipment Leasing LLC
Henco Equipment Leasing LLC
Calber Equipment leasing
The following link gives the search results and provides links to
where the reports can be purchased.
The top competitors to Marlin Business Services are American Express,
CIT Group and GE Commercial Finance. Source: Hoover?s
Yahoo! Finance gives a direct competitor comparison with figures
detailing market cap, employees, growth, revenue, gross margin etc.
<"small ticket" market "equipment leasing">
<"small ticket" market "equipment leasing" million>
<"economic census" equipment leasing gov 5324>
<"marlin business" competitors>
<Hope this helps.>