Monthly Confidence Index - Equipment Finance Industry (MCI-EFI)
December 2009
December 2009 Survey Results:
The overall Monthly Confidence Index of the Equipment Finance Industry (MCI-EFI) is 58.8, an increase from 57.2 in November 2009. Respondents indicate:
- When asked to assess if their current business conditions would remain the same over the next four months, 31.1 % of executives responding said they believe business conditions will improve over the next four months. Only 2.2% believe conditions will get worse, and the majority 66.7% believe business conditions will remain the same over the next four months compared to 55.8% in November.
- 66.7% of survey respondents believe demand for leases and loans to fund Capital Expenditures (Cap Ex) will "remain the same" over the next four months and 26.7% indicated there will be an increased demand for leases or loans to fund Cap Ex.
- The majority of survey respondents, 95.6% of executives expect the same or slightly more access to capital to fund equipment acquisitions over the next four months, down slightly from 97.7% in November.
- When asked, 15.6% of the executives reported they expect to hire more employees over the next four months, down from 25.6% in November, and 64.4% expect no change in headcount, up from 48.8% in November.
- 100% of the leadership evaluates the current U.S. economy as "poor" or "fair." In December, 51.1% rated the economy as "fair," up significantly from 37.2% in November.
- 42.2% of survey respondents believe the U.S. economic conditions will get "better" over the next six months, an increase from 37% of those who responded the same in November. 51% believe the US economy will "stay the same." 6.7% believe the economy will get worse during the same period, down from 11.6% in November.
- 33.3% of respondents believe their company will increase spending on business development activities during the next six months, while 66.7% believe their will be "no change" in business development spending.
December 2009 Survey Comments from Industry Executive Leadership:
From the Bank market:
"After over 18 months of market turmoil, we are beginning to see signs of stabilization and, in some areas around portfolio quality; we are witnessing modest improvements and positive trends." Adam Warner, Key Equipment Finance.
From the Independent market:
"[I am] still very concerned about liquidity. Demand seems to be picking up slightly but funding is still very tight" George Booth, Black Rock Capital, LLC
From the Captive market:
"2010 will be better than 2009, but we will see more companies fail or cease to exist in their current form." Rob Stowers, Altec Capital
Survey Respondent Demographics:
Market Segment:
- Bank 35.6%
- Captive 22.2%
- Financial Services 13.3%
- Independent 26.7%
Market Segments Based on Transaction Size of New Business Volume
- Large-Ticket (New Business Volume Avg. Transaction Size Over $5 Million) 15.6%
- Middle-Ticket (New Business Volume Avg. Transaction Size of $250,000 - $5 Million) 53.3%
- Small-Ticket (New Business Volume Avg. Transaction Size of $25,000 - $249,999) 31.1%
- Micro-Ticket (New Business Volume Avg. Transaction Less Than $25,000) 0.0%
Organization Size (Based on Annual New Business Volume for Fiscal Year 2008):
- Under $50 Million 13.3%
- $50 Million - $250 Million 11.1%
- $250 Million - $1 Billion 31.1%
- Over $1 Billion 44.4%