Equipment finance lenders outlook positive

When asked about the outlook for the future, MCI-EFI survey respondent Frank Campagna, business line manager, M&T Commercial Equipment Finance, said: “Our optimism in the economy requires putting a blind eye to the current political climate with the hope that sensible minds will prevail; we are seeing a demand in most industry sectors and geographic regions that we serve.

“Clients, especially in the transportation sector, are turning over equipment more frequently and are returning to using tax lease structures more than in the recent past. Clients are also more interested in discussing financing alternatives and engaging in the planning process with us early, which indicates a willingness and need to spend on capex.”

When asked to assess their business conditions over the next four months, 10% of executives responding said they believe business conditions will improve over the next four months, unchanged from January. Most (83.3%) believe business conditions will remain the same over the next four months, an increase from 70% the previous month.

There is a substantial fall in those who believe business conditions will worsen, now at 6.7% and down from 20% who believed so the previous month.

There is also a marked increase in those who believe demand for leases and loans to fund capital expenditures will increase over the next four months, with 13.3% now reporting this compared to 3.3% in January.

Most (83.3%) believe demand will “remain the same” during the same four-month time period, an increase from 80% the previous month, while 3.3% believe demand will decline, down from 16.7% who believed so in January.

Views on the current US economy are all unchanged from last month, with a third viewing it as “excellent,” and the remaining two-thirds rating the economy as “fair”.

Respondents are also more positive about the future outlook. Currently 13.3% of the survey respondents believe that US economic conditions will get “better” over the next six months, up from 10% in January.

Just 16.7% believe economic conditions will worsen over the next six months, a decrease from 40% in January.

Paul Menzel, president and CEO, Financial Pacific Leasing, said: “Economic fundamentals are good and the financial condition of the banking industry is as sound as it has ever been. Biggest concerns are the absence of strong political leadership and how it might result in a Black Swan event.”