Direct Answer
64 SEC filers are classified under the Standard Industrial Classification codes that describe the commercial finance industry, and their latest annual reports show $70.6 billion of combined revenue and a median operating margin of -111.9%. Investors should still evaluate its revenue model, industry-specific KPIs, valuation framework and the risks that can change the group's economics.
Industry Overview
Commercial finance companies provide equipment loans, leases, factoring and asset-based lending to businesses outside the traditional bank market. Spreads and collateral quality drive returns, and funding cost matters. The first numbers to compare across companies here are new business volume, net finance margin and charge-offs.
Key Industry Metrics
- New business volume: Value of new loans, leases and factoring written. It reflects business demand for credit outside banks, and shows growth in the book.
- Net finance margin: Interest and fee income less the cost of funds, relative to assets. It shows the profit margin, which narrows if funding costs rise faster than yields.
- Charge-offs: Loans written off after recoveries as a share of balances. Collateral lowers losses, but weak borrowers still produce them in downturns.
- Funding cost: Rate paid on borrowings that fund lending. Because these lenders lack deposits, it drives margins and depends on credit market access.
- Collateral coverage: Value of pledged assets compared with the amount lent. Thicker cushions protect against losses when borrowers fail.
Primary Macro Drivers
- Business investment: Companies expand and buy equipment or inventory with financing, so business investment lifts new business volume.
- Bank lending standards: When banks tighten lending standards, more borrowers use non-bank lenders, adding volume and allowing better pricing.
- Interest rates: Rates set both borrower demand and the lender's funding cost, shown in net finance margin and funding cost.
- Collateral values: Collateral values set advance rates and recoveries, so changes affect collateral coverage and losses given default.
Major Risks
- Credit losses in downturns: Business failures rise together and collateral loses value, which raises charge-offs. Watch charge-offs, collateral coverage and new business volume.
- Funding market access: Non-bank lenders depend on credit lines and securitizations, so market stress limits growth and raises cost. Watch funding cost and facility terms.
- Concentration: A few large borrowers or one industry can drive losses. Watch the portfolio mix and top exposures in filings.
- Regulation: Changes in lending, licensing or disclosure rules can raise costs or restrict products. Watch regulatory actions and compliance spending.
Industry Characteristics
| Characteristic | Profile |
|---|---|
| Cyclicality | Cyclical |
| Capital Intensity | High |
| Regulatory Intensity | Low |
| Industry Maturity | Mature |
| Geographic Importance | U.S. |
Commercial Finance Filers in the SEC Record
64 companies with annual reports in the dataset are classified by the SEC in the Standard Industrial Classification codes 6153, 6199. Their latest fiscal years end between 2022 and 2026, and together they reported $70.6 billion of revenue. Median revenue growth over the prior year was 10.0%. Median operating margin was -111.9% and median net margin -141.1%. Median total liabilities were 47% of total assets, and 14 of 64 reported a profit in their latest year.
| Company | Revenue | Growth | Operating margin | Net margin | Year |
|---|---|---|---|---|---|
| American Express Co | $41.3 billion | 6.4% | n/a | 26.2% | FY 2025 |
| Coinbase Global, Inc. | $7.2 billion | 9.4% | 20.0% | 18.1% | FY 2025 |
| Circle Internet Group, Inc. | $2.7 billion | 63.9% | -3.5% | -2.5% | FY 2025 |
| Bakkt, Inc. | $2.3 billion | -32.1% | -6.3% | -4.6% | FY 2025 |
| Chime Financial, Inc. | $2.2 billion | 30.7% | -47.6% | -46.2% | FY 2025 |
| Green Dot Corp | $2.1 billion | 20.7% | 0.7% | -4.8% | FY 2025 |
| Pagaya Technologies Ltd. | $1.3 billion | 26.1% | 20.3% | 6.3% | FY 2025 |
| Pra Group Inc | $1.2 billion | 7.8% | -2.5% | -25.4% | FY 2025 |
The 8 largest of 64 by revenue. Source: each company's own annual report as filed with the SEC (XBRL data), figures in U.S. dollars. A company's SIC code reflects its main business as the SEC records it, so it can differ from how an index provider or analyst classifies the company, and a diversified group appears under only one code.
Where to Go Next
The Commercial Finance guide describes how the industry earns money, what to measure and what can go wrong. To see how it compares, read the neighbouring industries in the same sector, then apply the same checks to a specific company.
More in Financials
- Financials sector overview
- Commercial Lines Insurance
- Commercial Banks
- Commercial Mortgage REITs
- Card Networks
- Community Banks
- Capital Markets
- Consumer Banks
- Canadian Banks
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Frequently Asked Questions
What are the main KPIs for the Commercial Finance industry?
Key performance indicators for the Commercial Finance industry include: New business volume, Net finance margin, Charge-offs, Funding cost, Collateral coverage. Which matter most depends on the company's model, so compare them across several companies rather than relying on one.
How cyclical is the Commercial Finance industry?
The Commercial Finance industry is cyclical, meaning its revenues and earnings tend to expand during economic expansions and contract during downturns. Investors should monitor leading economic indicators and interest rate trends when evaluating timing.
What are the biggest risks in the Commercial Finance industry?
The primary risks for Commercial Finance companies include: Credit losses in downturns, Funding market access, Concentration, Regulation. Investors should assess each company's exposure to these factors and its track record of navigating them.