IT LEASING EXPECTED TO REVIVE AS BUSINESSES REPLENISH IT

According to a study that the Equipment Leasing Association (ELA) commissioned, business-technology software and equipment leasing is expected to revive as businesses replenish IT stocks while preserving cash.

The IT leasing industry, a conglomeration of captive and third-party lessors, banks, and channel distributors, posted $23.8 billion in volume last year, its lowest level since 1998, IT leasing peaked at $26.1 billion in 2000 and has dropped for the last two years, reflecting pinched budgets. As purse strings loosen, volume is projected to grow 6.5% annually - far healthier than the 1.5% annual growth rate of the last five years. "Companies can't wait much longer to invest in productive capital equipment in the IT sector," stated Ralph Petta, the association's VP of industry services.

IT is one of the few bright spots in the ailing U.S. equipment-finance industry, Petta says. Other industries that depend on lease financing, such as airlines - half the U.S. airline fleet is leased - are making do with older equipment until the economy improves. PCs and workstations were the largest IT leasing segment in 2002, with nearly $9 billion in volume. Mainframes and servers were next at $7 billion, followed by software at $4billion.

TEAM Equipment Leasing specializes in technology financing.

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