New York, June 27, 2023 (GLOBE NEWSWIRE) -- According to the research report “Global Financial Leasing Market” published by Consegic Business Intelligence, the market was sized at USD 209.69 Million in 2022 and is expected to reach over USD 316.71 Million by the year 2030, growing at a CAGR of 5.4%.
Financial leasing is defined as a financial arrangement in which a finance company termed as a lessor provides an asset to another party called as lessee for a specific period of time and the lessee will pay a series of installments to the lessor. The lessor recovers the complete cost or a large part of the asset and also earns interest from the rentals paid by the lessee.
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The increasing demand of financial leasing from small and medium-sized enterprises to reduce the upfront cost serves as the major factor responsible for driving the growth of the market. Financial leasing provides a viable alternative by allowing small businesses to access the necessary equipment, machinery, or vehicles without the need for significant capital outlays. Additionally, by providing a means to overcome capital limitations, financial leasing enables businesses to expand the operations, enhance productivity, and pursue growth opportunities. Furthermore, the presence of key players in the market are constantly introducing advanced leasing solutions to strengthen the market position, thus contributing remarkably in accelerating market growth. For instance, in December 2022, Mobilize Financial Services launched Mobilize Lease&Co. to fasten the deployment of leasing and also to meet the mobility needs of customers. The leasing solution is developed to offer fleet management services to small and medium enterprises and is expected to reach a fleet size of 1 million vehicles by 2030.
Moreover, cross-border leasing is expected to create potential future opportunities for the growth of the financial leasing market by enabling businesses to expand the operations into new markets and countries. Financial leasing provides a flexible and cost-effective solution to acquire assets without committing to long-term ownership, thus creating new growth opportunities for lessors, to cater to the equipment needs of multinational corporations and businesses. However, regulatory and legal constraints associated with financial leasing including the International Financial Reporting Standards (IFRS) and the Generally Accepted Accounting Principles (GAAP) is hampering the growth of the market.
| Report Attributes | Report Details |
| Market Size By 2030 | USD 316.71 Million |
| Forecast Period | 2023-2030 |
| CAGR (2023-2030) | 5.4% |
| Base Year | 2022 |
| Study Timeline | 2017-2030 |
| Key Players | Bank of America Corporation, BNP Paribas Leasing Solutions, Commerce Bancshares, Inc., Crest Capital, Fifth Third Bank, HSBC Group, M&I Equipment Finance, North Star Leasing, SMBC Group, Texas Capital Bancshares, Inc., Wells Fargo Bank N.A., XCMG America Financial LLC |
| By Type | Banks and Non-Banks |
| By Product | Domestic Business and International Business |
| By Application | Transportation, Medical Devices, Energy & Environment, Construction Equipment, Industrial Machinery, IT & Telecom, and Others |
| Report Coverage | Company Ranking and Market Share, Growth Factors, Total Revenue Forecast, Regional Competitive Landscape, Business Strategies, and more |
| By Region | North America, Europe, Asia-Pacific, Latin America, Middle East & Africa |
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Financial Leasing Market Growth Drivers:
- Quick access to capital by small-medium enterprises (SMEs) resulting in improved productivity is driving the growth of the financial leasing market.
- Emergence of advanced solutions including 360-degree capital leasehold to reduce upfront costs is propelling the market growth.
- Financial leasing allows businesses to acquire a range of hardware and equipment in the IT industry eliminating the need to invest in large upfront capital is bolstering the market growth.
Restraints
- Regulatory and legal constraints associated with financial leasing including the International Financial Reporting Standards (IFRS) and the Generally Accepted Accounting Principles (GAAP) are hampering the growth of the market.
- Credit and risk assessment associated with financial leasing is restraining the market growth.
Opportunities
- Cross-border leasing is expected to create potential future opportunities for the growth of the financial leasing market by enabling businesses to expand the operations into new markets and countries.
Global Financial Leasing Market Segmentation Details:
Based on Type, the bank segment contributed the largest shares to the market growth in 2022. The growth is attributed to the well-established infrastructure and networks to offer a wide range of financial products and services, including financial leasing. Additionally, banks have existing relationships with customers and the necessary expertise in risk management that gives banks a competitive advantage in providing financial leasing services. Furthermore, banks are also entering into partnerships with financial leasing firms to enhance the customer base, particularly among small and medium enterprises (SMEs), thus contributing significantly in driving the growth of the market.
Based on Product, the domestic business segment offered substantial shares to the global financial leasing market in the year 2022. The growth is attributed to the well-established relationship of domestic businesses with local suppliers, manufacturers, and customers that provide a competitive advantage in identifying and fulfilling leasing opportunities. Additionally, domestic businesses have a deep understanding of the local market conditions, including industry dynamics, customer preferences, and regulatory frameworks. Familiarity with the local market allows domestic businesses to better assess risks, structure lease agreements, and provide tailored solutions to meet the specific needs of local customers, thus contributing significantly in driving the market growth.
Based on Application, the IT & telecom segment holds the maximum share to the market growth in the year 2022. IT & telecom companies require a range of hardware and equipment including servers, networking devices, telecommunications equipment, data centers, and communication towers. Financial leasing allows businesses to acquire such assets without a large upfront capital investment. Additionally, leasing agreements are structured to cover the cost of the equipment, installation, maintenance, and upgrades, providing flexibility and ensuring that businesses have access to the latest technology, hence contributing in propelling the market growth.
Based on region, North America has been a major contributor to the growth of the financial leasing market. The growth is attributed to the well-developed and established financial services industry in the region that increases the demand of advanced financial leasing solutions to reduce upfront costs. In addition, North America encompasses some of the largest banks, financial institutions, and leasing companies, further driving the growth of the market. Furthermore, the institutions have extensive experience, expertise, and infrastructure in providing financial leasing services. Moreover, the presence of key players in the region including Wells Fargo Leasing, XCMG America Financial LLC, and M&I Equipment Finance constantly apply strategic decisions through mergers and collaboration to strengthen the market position.
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Recent Developments
- In February 2023, CSI Leasing expanded the Asia Pacific operations by launching subsidiaries in Thailand, Taiwan, Bangkok, and Taipei City. The expansion is made to increase the customer base in Asia Pacific countries and also to provide a seamless operational experience to customers.
- In September 2020, LCI Operations Limited and Sumitomo Mitsui Finance and Leasing (SMFL) announced a joint venture of USD 230 Million helicopter leasing business. The venture is utilized by operators globally on a range of missions including Search and Rescue (SAR), Emergency Medical Services (EMS), and transportation to offshore wind farms.
Key Market Highlights
- Globally, financial leasing is divided based on the type into banks and non-banks.
- In the context of the product, the market is separated into domestic business and international business.
- The application segment of financial leasing is classified into transportation, medical devices, energy & environment, construction equipment, industrial machinery, IT & telecom, and others.
- The market is geographically divided into five regions: North America, Europe, Asia-Pacific, Latin America, and Middle East and Africa.
- Asia Pacific and North America are estimated to support the market growth during the forecast period in terms of the large presence of market players.
List of Major Global Financial Leasing Market Players
The market research report examines various market factors to determine the key drivers, limitations, and opportunities affecting market players. The report includes a SWOT analysis, regional analysis, and segment analysis to give a complete view of the market situation. This evaluation helps to identify possible growth opportunities through the implementation of technology, product utilization, business strategies, and the launch of new machines. The following are major market players operating in the market environment —
- Bank of America Corporation
- BNP Paribas Leasing Solutions
- Commerce Bancshares, Inc.
- Crest Capital
- CSI Leasing, Inc.
- Fifth Third Bank
- HSBC Group
- LCI Operations Limited
- M&I Equipment Finance
- North Star Leasing
- SMBC Group
- Texas Capital Bancshares, Inc.
- Wells Fargo Bank N.A.
- XCMG America Financial LLC
Global Financial Leasing Market Segmentation:
- By Type
- Banks
- Non-Banks
- By Product
- Domestic Business
- International Business
- By Application
- Transportation
- Medical Devices
- Energy & Environment
- Construction Equipment
- Industrial Machinery
- IT & Telecom
- Others
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Key Questions Covered in the Financial Leasing Market Report
- What will be the potential market valuation for the financial leasing market by 2030?
- The market valuation for financial leasing is expected to be approximately USD 316.71 million by 2030 driven by the increasing adoption of financial leasing by small-medium enterprises to reduce the upfront costs.
- Based on current market trends and future predictions, which geographical region will have the largest impact on the financial leasing market's growth in the coming years?
- Asia Pacific is anticipated to witness the fastest CAGR during the forecast period due to the growing demand for digital devices, data centers, and software assets, thus contributing to the rapid growth of financial leasing in the region.
- What specific segmentation details are covered in the financial leasing market report, and how is the dominating segment impacting the market growth?
- The IT & telecom segment dominated the market by application in 2022 as financial leasing allows businesses to acquire a range of hardware and equipment without a large upfront capital investment.
- What specific segmentation details are covered in the financial leasing market report, and how is the fastest segment anticipated to impact the market growth?
- International businesses are projected to witness the fastest CAGR by product type in the financial leasing market. The growth is endorsed by the ability of international businesses that have sufficient resources and capabilities to expand the operations beyond the domestic borders. Furthermore, international businesses seek financial leasing options to acquire assets and equipment in new emerging markets that contribute remarkably in spurring the market growth.
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