Equipment finance market picking up

Confidence in the equipment finance market has increased for the second consecutive month according to data from the Equipment Leasing and Finance Foundation, which shows a greater proportion of executives expect business to start picking up.

The Foundation’s April 2016 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) has risen to 59.1, an increase from the March index of 51.6.

Four times as many executives (12.1%) expect business conditions to improve over the next four months, an increase from 3.2% in March. Just 12.1% now believe business conditions will worsen, compared to 19.4% the previous month.

There has been a marked rise in the number of respondents who maintain demand for leases and loans to fund capital expenditures will increase over the next four months, up from 9.7% to 15.2%. A quarter (24.2%) also expect more access to capital to fund equipment acquisitions, an increase from 16.1% in March.

The majority (97%) of those polled evaluate the current US economy as “fair,” while 3% of the survey respondents believe that US economic conditions will get “better” over the next six months, an increase from none who believed so in March.

“Because of the uncertain economic environment companies continue to take a very conservative approach to capital expenditures. This is compounded by the severe downturn in the energy markets, which have historically been very active in the equipment finance market. Unfortunately, I believe the near term prospects for equipment finance are for reduced levels of activity compared to prior years,” cautioned Thomas Jaschik, president, BB&T Equipment Finance.