Over 21,000 organizations that rent out equipment are currently operating in the United States, according to IBISWorld. These businesses bring in more than $55 billion in yearly revenue and employ over 300,000 people. Over the previous five years, the industry has expanded gradually, with an average annual growth rate of 2.8% from 2016 to 2021.
The US rental market is sizable and is anticipated to keep expanding. The US market for equipment rentals was estimated to be worth $58.1 billion in 2019 and is expected to increase to $81.2 billion by 2024, rising at a CAGR of 6.9% over the forecast period.
Numerous economic sectors, including construction, transportation, and events, depend on the equipment rental market. Businesses and individuals who require access to specialist equipment but do not willing to spend in buying it can use it as a flexible and affordable alternative. Customers can save time and money by using the maintenance and repair services that rental firms offer.
Equipment rental is the term used in accounting to describe the temporary rental of tangible assets including machinery, vehicles, and equipment. The lessee’s payment of the rent is deducted as a cost from the income statement. Since the rental equipment is not property of the company, it is not listed as an asset on the balance sheet. However, if leased equipment satisfies specific requirements, such as being long-term or transferring ownership to the lessee at the conclusion of the lease term, it may be classified as an asset.
In conclusion, the US equipment rental market is enormous, with more than 21,000 businesses bringing in more than $55 billion annually. Demand from numerous economic sectors is anticipated to boost the industry’s growth in the future. Except in certain cases, renting out equipment is recognized as an expense in accounting and is not listed as an asset on the balance sheet.