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Independent, non-profit Foundation studying markets, trends and operations to illuminate the future of the equipment finance industry.

January 2011 Survey Results

The overall MCI-EFI is 69.7, an increase from the December index of 64.8.

  • When asked to assess if their current business conditions would remain the same over the next four months, 52.6% of executives responding said they believe business conditions will improve over the next four months, an improvement from 47.5% in December. 44.7% of respondents believe business conditions will remain the same over the next four months, down from 50% in December, and 2.6% believe conditions will get worse, unchanged from December.
  • 57.9% of survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, up from December 42.5%. 39.5% believe demand will "remain the same" during the same four-month time period, down from 55% in December. 2.6% believe demand will decrease, flat for the last two months.
  • 31.6% of executives expect more access to capital to fund equipment acquisitions over the next four months, up from 25% in December. 68.4% of survey respondents indicate they expect the "same" access to capital to fund business, a decrease from 75% in December. In the last two months' surveys, no one responded that they expect "less" access to capital.
  • When asked, 39.5% of the executives reported they expect to hire more employees over the next four months, down half a percentage point from December. 52.6% expect no change in headcount over the next four months, up from 50% in December, while 7.9% expect fewer employees, down from 10% in December.
  • 81.6% of the leadership evaluate the current U.S. economy as "fair," up from 67.5% who did in December. 18.4% rate it as "poor," down significantly from 32.5% in December.
  • 52.6% of survey respondents believe that U.S. economic conditions will get "better" over the next six months, up from 40% in December. 47.4% of survey respondents indicate they believe the U.S. economy will "stay the same" over the next six months, down from 57.5% in December. No one responded that they believe economic conditions in the U.S. will worsen over the next six months, an improvement from 2.5% who believed so in December.
  • In January, 52.6% of respondents indicate they believe their company will increase spending on business development activities during the next six months, up from 42.5% in December. 47.4% believe there will be "no change" in business development spending, down from 55% last month, and no one believes there will be a decrease in spending, improved from 2.5% who believed so last month.

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January 2011 MCI Survey Comments from Industry Executive Leadership

Depending on the market segment they represent, executives have differing points of view on the current and future outlook for the industry.

Bank, Large Ticket

"2011 should see an increased demand for equipment financing with the improving economy." Senior executive, Large-Ticket Bank

Bank, Middle Market

"Confidence in the economy and business climate appears to be improving, with increased interest and volume of business noted in December. The transaction pipeline is reflecting growth over last year, and the first quarter forecast projects an increased capital expenditure appetite by customers for replacement and new equipment." Russell Nelson, President, Farm Credit Leasing Services Corporation

Independent, Small Ticket

"As employment growth goes, so will demand for equipment. Capital will be plentiful for companies that adjust to lower leverage ratios. There still are opportunities to be rewarded for taking equipment and credit risk assuming these risks are well managed." David T. Schaefer, President, Orion First Financial, LLC

Independent, Micro-Ticket

"The small and micro business climate continues to be guarded. Recovery in these sectors is lagging that of larger companies." Paul Menzel, President and CEO, Financial Pacific Leasing, LLC

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Survey Respondent Demographics:

Market Segment:

  • Bank: 417.4%
  • Captive: 18.4%
  • Financial Services: 7.9%
  • Independent: 23.7%
  • Other: 2.6%

Market Segments Based on Transaction Size of New Business Volume

  • Large-Ticket (New Business Volume Avg. Transaction Size Over $5 Million): 13.2%
  • Middle-Ticket (New Business Volume Avg. Transaction Size of $250,000 - $5 Million): 52.6%
  • Small-Ticket (New Business Volume Avg. Transaction Size of $25,000 - $249,999): 28.9%
  • Micro-Ticket (New Business Volume Avg. Transaction Less Than $25,000): 5.3%

Organization Size (Based on Annual New Business Volume for Fiscal Year 2009):

  • Under $50 Million: 7.9%
  • $50 Million - $250 Million: 23.7%
  • $250 Million - $1 Billion: 36.8%
  • Over $1 Billion: 31.6%

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