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

April 2010 MCI-EFI

April 2010 Survey Results:

The overall MCI-EFI is 65.4, a significant improvement from March 2010 index of 60.1.

  • When asked to assess if their current business conditions would remain the same over the next four months, 65% of executives responding said they believe business conditions will improve over the next four months, up significantly from 45% in March. 5% believe conditions will get worse, and 30% believe business conditions will remain the same over the next four months.
  • 50% of survey respondents believe demand for leases and loans to fund capital expenditures (capex) will "remain the same" over the next four months, down from 60% in March, while 47.5% indicated there will be an increased demand for leases or loans to fund capex, up from the 35% in March.
  • 62.5% of the survey respondents indicate they expect the "same" access to capital to fund business, down from 67.5% in March. 35% of executives expect more access to capital to fund equipment acquisitions over the next four months, up from 30% in March.
  • When asked, 22.5 % of the executives reported they expect to hire more employees over the next four months, down from 25% in March, and 67.5% expect no change in headcount over the next four months, compared to 60 % from March 2010.
  • 100% of the leadership still evaluates the current U.S. economy as "poor" or "fair." In April, 65% rated the economy as "fair" and 35% rated the economy as "poor," an improvement from March when 57.5% of respondents rated the economy at "fair" and 42.5% rated the economy as "poor."
  • 47.5% of survey respondents believe the U.S. economic conditions will get "better" over the next six months, up significantly from the March responses of 35%. 47.5% of survey respondents indicate they believe the US economy will "stay the same" over the next six months.
  • In April, 35% , compared to30% of respondents in March, believe their company will increase spending on business development activities during the next six months. 65% believe there will be "no change" in business development spending.

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April 2010 Survey Comments from Industry Executive Leadership:

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

  • Small Ticket:

    “We are starting to see improvement in both new production activity and portfolio quality metrics -- both lower delinquency and losses.” Jerry Newell, Bank of the West

  • Middle Market:

    “We are finally seeing more activity with smaller customers, a very good sign that work is filtering down to the small business sector.” Rob Stowers, Altec Capital

  • Large TIcket:

    “The near term outlook is stronger than anytime during the last 18 months,” Large-ticket CEO.

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Survey Respondent Demographics:

Market Segment:

  • Bank 41.0%
  • Captive 20.5%
  • Financial Services 7.7%
  • Independent 28.2%
  • Other 2.6%

Market Segments Based on Transaction Size of New Business Volume

  • Large-Ticket (New Business Volume Avg. Transaction Size Over $5 Million) 12.8%
  • Middle-Ticket (New Business Volume Avg. Transaction Size of $250,000 - $5 Million) 53.8%
  • Small-Ticket (New Business Volume Avg. Transaction Size of $25,000 - $249,999) 30.8%
  • Micro-Ticket (New Business Volume Avg. Transaction Less Than $25,000) 2.6%

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

  • Under $50 Million 12.8%
  • $50 Million - $250 Million 25.6%
  • $250 Million - $1 Billion 25.6%
  • Over $1 Billion 35.9%

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