Confidence leap in asset finance market

Confidence in the equipment finance market has improved markedly since the result of the US presidential election was announced, according to data from the Equipment Leasing and Finance Foundation.

Its December 2016 monthly confidence index for the equipment fiancé industry (MCI-EFI) now stands at 67.5, a sharp increase from the November index of 54.6, with equipment finance executives expressing post-election optimism.

When asked about the outlook for the future, MCI-EFI survey respondent David Normandin, managing director, commercial finance group, Hanmi Bank, said: “I am optimistic as the election cycle is finally behind us, and regardless of the side, people will begin to accept it and move forward. I also think an interest rate increase will be healthy, and I believe that we will see that happen this coming year.”

When asked to assess their business conditions over the next four months, 48.4% of executives responding to the survey said they believe business conditions will improve, an increase from 13.8% in November.

Currently, 6.5% believe business conditions will worsen, a decrease from 17.2% the previous month.

Over a third (38.7%) of survey respondents believe demand for leases and loans to fund capital expenditures will increase over the next four months, an increase from 13.8% in November. The proportion expecting to see a decline in demand has more than halved, now standing at 6.5%, down from 17.2% who believed so in November.

As in the November survey, 100% of the leadership evaluate the current US economy as “fair,” and none evaluate it as “poor,” both also unchanged from November.

However 71% of the survey respondents believe that US economic conditions will get “better” over the next six months, an increase from 17.2% in November. Just a quarter (25.8%) of survey respondents indicate they believe the US economy will “stay the same” over the next six months, a decrease from two thirds (65.5%) the previous month.

Meanwhile, there has been a steep drop in the number (3.2%) who believe economic conditions in the US will worsen over the next six months, down from 17.2% who believed so last month.

William Besgen, senior advisor, vice chairman emeritus, Hitachi Capital America Corp, said: “I believe that with the election now over there will be a more stable and hopefully a more positive business environment, which will translate to an increase in financing opportunities.”