Uncategorized Archives - Equipment Leasing & Finance Foundation

Equipment Finance Industry Confidence Eases in April

Washington, DC, April 18, 2024 – The Equipment Leasing & Finance Foundation (the Foundation) releases the April 2024 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) today. The index reports a qualitative assessment of both the prevailing business conditions and expectations for the future as reported by key executives from the $1 trillion equipment finance sector. Overall, confidence in the equipment finance market is 52.9, the second highest index in the last two years after last month’s index of 55.2.

When asked about the outlook for the future, MCI-EFI survey respondent Mark Bonanno, President and Chief Operating Officer, North Mill Equipment Finance, said, “Monetary policy has not been as effective in taming inflation that recently came in at an annual rate of 3.2%. The U.S. government as well as the consumer (via credit cards) have unsustainable debt levels, and that will eventually cause cracks in the economy.”

April 2024 Survey Results:
The overall MCI-EFI is 52.9, a decrease from the March index of 55.2.

When asked to assess their business conditions over the next four months, 10.7% of the executives responding said they believe business conditions will improve over the next four months, a decrease from 19.4% in March. 85.7% believe business conditions will remain the same over the next four months, up from 77.4% the previous month. 3.6% believe business conditions will worsen, relatively unchanged from 3.2% in March.
7.1% of the survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, down from 25.8% in March. 92.9% believe demand will “remain the same” during the same four-month time period, up from 71% the previous month. None believe demand will decline, a decrease from 3.2% in March.
14.3% of the respondents expect more access to capital to fund equipment acquisitions over the next four months, down from 16.1% in March. 71.4% of executives indicate they expect the “same” access to capital to fund business, down from 74.2% last month. 14.3% expect “less” access to capital, up from 9.7% the previous month.
When asked, 17.9% of the executives report they expect to hire more employees over the next four months, a decrease from 19.4% in 71.4% expect no change in headcount over the next four months, up from 67.7% last month. 10.7% expect to hire fewer employees, down from 12.9% in March.
None of the leadership evaluate the current U.S. economy as “excellent,” unchanged from the previous month. 92.9% of the leadership evaluate the current U.S. economy as “fair,” down from 93.6% in March. 7.1% evaluate it as “poor,” up from 6.5% last month.
17.9% of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, down from 25.8% in March. 71.4% indicate they believe the U.S. economy will “stay the same” over the next six months, an increase from 54.8% last month. 10.7% believe economic conditions in the U.S. will worsen over the next six months, a decrease from 19.4% the previous month.
In April, 17.9% of respondents indicate they believe their company will increase spending on business development activities during the next six months, a decrease from 22.6% the previous month. 78.6% believe there will be “no change” in business development spending, up from 64.5% in March. 3.6% believe there will be a decrease in spending, down from 12.9% last month.

April 2024 MCI-EFI Survey Comments from Industry Executive Leadership:

Bank, Middle Ticket
“Our business is focused on agriculture and rural America. In many cases, ag producer profitability is down or expected to be down compared to the levels of recent years. This situation could make the cash flow and liquidity preservation benefits of a lease more attractive and valuable than they have been. The offset is that credit quality may be more of a challenge, but we expect it to remain quite manageable.” Jason Lueders, President, Farm Credit Leasing

Independent, Small Ticket
“The overspending by the Federal government is contributing greatly to driving up inflation.” James D. Jenks, CEO, Global Finance and Leasing Services, LLC

How may I access the MCI-EFI?
Survey results are posted on the Foundation website, https://www.leasefoundation.org/industry-resources/monthly-confidence-index/. Details about the MCI, including who participates, how it’s designed, and the survey respondent demographics are also available at the link above.

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ABOUT THE FOUNDATION
The Equipment Leasing & Finance Foundation is a 501c3 non-profit organization that propels the equipment finance sector—and its people—forward through industry-specific knowledge, intelligence, and student talent development programs that contribute to industry innovation, individual careers, and the advancement of the equipment leasing and finance industry. The Foundation is funded through charitable individual and corporate donations. Learn more at www.leasefoundation.org

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Media Contact: Kelli Nienaber, knienaber@leasefoundation.org

Q2 Update to the 2024 Economic Outlook Forecasts 2.2% Expansion in Equipment and Software Investment, 2.3% GDP Growth

Washington, DC, April 17, 2024 – Driven by strong consumer spending and a resilient labor market, the U.S. economy continues to expand at a healthy clip, according to the Q2 update of the 2024 Equipment Leasing & Finance U.S. Economic Outlook. Real equipment and software investment growth is projected to be 2.2% in 2024, with activity expected to pick up in the latter half of the year. The report, which was prepared by Keybridge and released today by the Equipment Leasing & Finance Foundation, also forecasts real GDP growth of 2.3% this year, an improvement over the 1.7% growth forecasted in the Foundation’s 2024 Economic Outlook published last December.

The Foundation’s report is focused on the $1.16 trillion equipment leasing and finance industry and highlights key trends in equipment investment, placing them in the context of the broader U.S. economic climate.

Leigh Lytle, President of the Foundation, and President & CEO of the Equipment Leasing and Finance Association, said, “The Foundation’s Q2 Outlook shows that the ‘soft landing’ appears to be on track. Although equipment and software investment has been weak across most verticals over the last year, activity is expected to pick up as the year goes on, consistent with recent releases of the Foundation’s Momentum Monitors and Monthly Confidence Index. The Fed is likely to be cautious about rate cuts, particularly given recent backtracking on inflation, but we still expect borrowing costs to fall later this year.”

Highlights from the Q2 update to the 2024 Outlook include:

Equipment investment was negative for the second consecutive quarter, but continued strength in software investment led to overall E&S growth of 3.2% (annualized) in Q4. Economic conditions are generally positive, however, and a modest improvement in investment activity is expected later this year.
The U.S. economy continues to hum, driven by solid consumer spending and surprisingly robust job growth. Borrowing costs and year-to-date inflation remain elevated, however, putting pressure on U.S. consumers and raising the potential for a spending slowdown later this year. Meanwhile, a sluggish global economy may reduce business investment and demand for U.S. exports. For now, though, the Foundation expects both job growth and consumer spending to slow but remain healthy while inflation continues along its bumpy path toward the Fed’s 2% target.
Overall manufacturing activity remains soft in early 2024. Both industry production and capacity utilization have trended downward for most of the last 18 months, and manufacturing hours worked is near its lowest point since 2010 (excluding the pandemic’s peak). One potential bright spot is the ISM Purchasing Managers Index, which moved back into expansion territory in March.
Despite a general consensus that the U.S. economy remains on track for a soft landing, small business owners have a somewhat pessimistic outlook. Concerns regarding inflation are heightened, and both hiring and investment plans have slowed.
The Federal Reserve remains cautious, further delaying its long-awaited rate cut cycle in March, as progress toward its 2% target stalled in Q1. With job growth still robust, Fed officials are unlikely to begin cutting rates until this summer or fall. Two rate cuts in 2024 are the most likely outcome.

The Foundation-Keybridge U.S. Equipment & Software Investment Momentum Monitor, which is released in conjunction with the Economic Outlook, tracks 12 equipment and software investment verticals. In addition, the Momentum Monitor Sector Matrix provides a customized data visualization of current values of each of the 12 verticals based on recent momentum and historical strength. This month five verticals are expanding, two are recovering, three are weakening, and two are “on the line” between expanding and recovering. Over the next three to six months the Foundation expects the following trends to materialize on a year-over-year basis:

Agriculture machinery investment growth is expected to improve.
Construction machinery investment growth may improve.
Materials handling equipment investment growth should remain relatively flat.
All other industrial equipment investment growth is unlikely to improve and may worsen.
Medical equipment investment should strengthen.
Mining and oilfield machinery investment growth is likely to weaken.
Aircraft investment growth is unlikely to change significantly.
Ships and boats investment growth may improve modestly.
Railroad equipment investment growth is unlikely to change significantly.
Trucks investment growth has the potential to improve but is likely to remain relatively flat
Computers investment growth should strengthen.
Software investment growth should remain steady.

The Foundation produces the Equipment Leasing & Finance U.S. Economic Outlook report in partnership with economic and public policy consulting firm Keybridge Research. The annual economic forecast provides the U.S. macroeconomic outlook, credit market conditions, and key economic indicators. The Q2 report is the first update to the 2024 Economic Outlook, and will be followed by two more quarterly updates before the publication of the 2025 Economic Outlook in December.

Download the full report at https://www.leasefoundation.org/industry-resources/u-s-economic-outlook/.

Download the Momentum Monitor at https://www.leasefoundation.org/industry-resources/momentum-monitor/.

All Foundation studies are available for free download from the Foundation’s online library at http://store.leasefoundation.org/.

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Media Contact: Kelli Nienaber, knienaber@leasefoundation.org

New Foundation Study Offers In-Depth Examination of Surging Growth Opportunities in Climate Finance

Washington, DC, March 26, 2024 – An accelerated shift in government policy, corporate policy, and capital deployment strategy are precipitating enormous investment that is driving global growth in climate finance to an estimated $9 trillion by 2030. A new study, “Climate Finance: A Massive Commercial Opportunity for Equipment Finance,” released by the Equipment Leasing & Finance Foundation (Foundation) provides an overview of the climate finance opportunity by industry and asset type, reviews the current nature of financing by equipment finance companies, and provides a roadmap for industry participants to chart their course in climate finance.

The comprehensive study was commissioned by the Foundation and prepared by The Alta Group. It utilizes a multipronged approach, including a compilation of available market data, a survey of members of the Equipment Leasing and Finance Association’s Climate Finance Working Group, and in-depth interviews with participants in climate finance across the equipment finance industry.

Among the in-depth research and analysis in the study are:

Executive summary intended to be a stand-alone document summarizing all the content in the paper.
Overview of the global climate finance market.
Review of participation In climate finance across the industry today and examination of key segments, including solar finance, energy efficiency, electric vehicles (EV), energy storage, and green hydrogen.
Information and resources to aid in the analysis of market considerations.
Asset management and risk considerations.
Current headwinds and tailwinds in climate finance.

“Taking advantage of the sizable opportunities of providing climate finance involves the application of best practices and the mitigation of both traditional and emerging risks,” said Valerie Gerard, Foundation Research Committee Chair and Co-CEO of The Alta Group. “This study aims to accelerate the equipment finance industry’s understanding of climate finance, and offers a roadmap for equipment finance companies to develop their own strategic and tactical plans toward successfully participating in this market.”

Download the full report at https://tinyurl.com/ELFFClimateFin.

All Foundation studies are available for free download from the Foundation’s online library at http://store.leasefoundation.org/.

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Equipment Finance Industry Confidence Up Third Consecutive Month in March

Washington, DC, March 21, 2024 – The Equipment Leasing & Finance Foundation (the Foundation) releases the March 2024 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) today. The index reports a qualitative assessment of both the prevailing business conditions and expectations for the future as reported by key executives from the $1 trillion equipment finance sector. Overall, confidence in the equipment finance market increased for the third consecutive month to 55.2, up from the February index of 51.7, and the highest level since April 2022.

When asked about the outlook for the future, MCI-EFI survey respondent Keith Smith, President, Equipment & Franchise Finance, Star Hill Financial LLC, said, “Supply chain and demand seemed to have caught up to each other, we are finally seeing equipment ordered and delivered in real time. This has increased the overall activity in the equipment funding space. My biggest concern is the volatility the financial markets, specifically the health of mid-market/regional banks. Historically these institutions have been the backbone of funding in the equipment finance industry, and right now even the deposit-healthy institutions are slowing their lending due to regulatory concerns.”

March 2024 Survey Results:
The overall MCI-EFI is 55.2, an increase from the February index of 51.7.

When asked to assess their business conditions over the next four months, 19.4% of the executives responding said they believe business conditions will improve over the next four months, an increase from 10.7% in February. 77.4% believe business conditions will remain the same over the next four months, down from 82.1% the previous month. 3.2% believe business conditions will worsen, a decrease from 7.1% in February.
25.8% of the survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, up from 7.1% in February. 71% believe demand will “remain the same” during the same four-month time period, down from 78.6% the previous month. 3.2% believe demand will decline, a decrease from 14.3% in February.
16.1% of the respondents expect more access to capital to fund equipment acquisitions over the next four months, up from 14.3% in February. 74.2% of executives indicate they expect the “same” access to capital to fund business, down from 75% last month. 9.7% expect “less” access to capital, down from 10.7% the previous month.
When asked, 19.4% of the executives report they expect to hire more employees over the next four months, a decrease from 21.4% in February.7% expect no change in headcount over the next four months, down from 71.4% last month. 12.9% expect to hire fewer employees, up from 7.1% in February.
None of the leadership evaluate the current U.S. economy as “excellent,” down from 3.6% the previous month. 93.6% of the leadership evaluate the current U.S. economy as “fair,” up from 89.3% in February. 6.5% evaluate it as “poor,” down from 7.1% last month.
25.8% of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, up from 17.9% in February. 54.8% indicate they believe the U.S. economy will “stay the same” over the next six months, a decrease from 67.9% last month. 19.4% believe economic conditions in the U.S. will worsen over the next six months, an increase from 14.3% the previous month.
In March, 22.6% of respondents indicate they believe their company will increase spending on business development activities during the next six months, an increase from 21.4% the previous month. 64.5% believe there will be “no change” in business development spending, down from 67.9% in February. 12.9% believe there will be a decrease in spending, up from 10.7% last month.

March 2024 MCI-EFI Survey Comments from Industry Executive Leadership:

Bank, Small Ticket
“The borrowers that have navigated through the uncertain economic conditions and higher rates should emerge even stronger as the economy strengthens.” Charles Jones, Senior Vice President, 1^st Equipment Finance, Inc. (FNCB Bank)

“I continue to think that 2024 will be a solid growth year for Wintrust Specialty Finance. The year has started off strong with new business originations at double-digit increases over the same period in 2023. Application volume continues to be strong while approval rates are lower due to lower credit quality we are seeing in the market. Portfolio performance remains heightened from recent years and still performing favorably to historic averages. It is important to remain focused on quality and portfolio performance as we wade our way through the transition in the economy.” David Normandin, President and Chief Executive Officer, Wintrust Specialty Finance

Bank, Middle Ticket
“The normalization of income in the grains and oilseeds sector of production agriculture has the potential to increase demand for financing. It will also increase credit risk, albeit from exceptionally strong levels.” Jason Lueders, President, Farm Credit Leasing

Captive, Small Ticket
“Inventories are returning to pre-COVID levels and end users need to replace older equipment they were forced to keep in service. A stabilizing rate environment and an election coming up could make 2024 a very good year.” Jim DeFrank, EVP and Chief Operating Officer, Isuzu Finance of America, Inc.

Independent, Large Ticket
“I expect conditions to remain stable for the balance of the year due to the upcoming election and the anticipation for interest rates to decrease.” Jonathan Albin, Chief Operating Officer, Nexseer Capital

Independent, Small Ticket
“The net jobs growth is now relatively weak and there are fewer job openings. The Fed may have, or is near, achieving a ‘soft’ landing with the economy.” James D. Jenks, CEO, Global Finance and Leasing Services, LLC

ABOUT THE MCI

Why an MCI-EFI?
Confidence in the U.S. economy and the capital markets is a critical driver to the equipment finance industry. Throughout history, when confidence increases, consumers and businesses are more apt to acquire more consumer goods, equipment, and durables, and invest at prevailing prices. When confidence decreases, spending and risk-taking tend to fall. Investors are said to be confident when the news about the future is good and stock prices are rising.

Who participates in the MCI-EFI?
The respondents are comprised of a wide cross-section of industry executives, including large-ticket, middle-market and small-ticket banks, independents, and captive equipment finance companies. The MCI-EFI uses the same pool of 50 organization leaders to respond monthly to ensure the survey’s integrity. Since the same organizations provide the data from month to month, the results constitute a consistent barometer of the industry’s confidence.

How is the MCI-EFI designed?
The survey consists of seven questions and an area for comments, asking the respondents’ opinions about the following:

Current business conditions
Expected product demand over the next four months
Access to capital over the next four months
Future employment conditions
Evaluation of the current U.S. economy
S. economic conditions over the next six months
Business development spending expectations
Open-ended question for comment

How may I access the MCI-EFI?
Survey results are posted on the Foundation website, https://www.leasefoundation.org/industry-resources/monthly-confidence-index/, included in the Foundation Forecast eNewsletter, and included in press releases. Survey respondent demographics and additional information about the MCI are also available at the link above.

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Media Contact: Kelli Nienaber, knienaber@leasefoundation.org

Foundation Celebrates Inaugural Equipment Finance Course at ASU

Washington, DC, March 19, 2024—The Equipment Leasing & Finance Foundation celebrated a milestone in its new partnership with the W. P. Carey School of Business at Arizona State University in developing a first-of-its-kind equipment finance course curriculum. Twenty-four students—a number that is significantly above average for a new course—are registered for the inaugural spring semester new elective course focused on credit analysis and equipment leasing.

On March 19, students, along with ASU faculty, were invited to further their classroom learning and have an opportunity to meet and network with industry professionals during the Small Business Lending Forum hosted by Orion First in Phoenix. In addition to welcoming ASU students and faculty, the event sponsors selected the ASU equipment finance program as the recipient of a charitable donation raised from the event.

The Foundation/ASU partnership was initiated and led by equipment finance industry veteran and distinguished ASU alumnus Fred Van Etten, President of Midland Equipment Finance. Van Etten is a long-time, dedicated supporter of both the Foundation and ASU, and was inducted into the W. P. Carey School of Business 2023 Hall of Fame class.

“As the equipment finance industry has evolved and matured, it became obvious to me that educational support and rigor around the discipline at the college level was essentially non-existent,” he says. “Understanding the Foundation’s commitment to developing future industry talent and my experience with the academic resources available at ASU, the potential of bringing these two organizations was irresistible for me.”

The equipment finance curriculum is being developed at the direction of Dr. Laura Lindsey, Department of Finance Chair and the Cutler Family Endowed Professor. “We firmly believe that this innovative program will provide students with education and training that directly meets industry needs, bridging the gap between academia and real-world application,” she says. “This will facilitate a smooth transition for graduates who opt to pursue careers in this field.”

The next phase of the program will be to expand to a series of courses incorporating the finance elective, lease accounting, and additional coursework in sales and marketing. The goal is to launch a full certificate program in equipment finance by the 2026-27 academic year.

The W. P. Carey School of Business partnership is part of the Foundation‘s Campus to Career NextGen talent development programs, which are designed to fulfill the need for the equipment finance industry to attract the future workforce and to be intentional about diversity, equity, and inclusion efforts in recruiting. Other programs include the Foundation scholarship program of ten $5,000 student scholarships, industry volunteer presentations at colleges and universities, and internship listings and resources to connect students and employers.

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ABOUT THE FOUNDATION
The Equipment Leasing & Finance Foundation is a 501c3 non-profit organization that propels the equipment finance sector—and its people—forward through industry-specific knowledge, intelligence, and programs that contribute to industry innovation, individual careers, and the overall betterment of the equipment leasing and finance industry. The Foundation is funded through charitable individual and corporate donations. Learn more at www.leasefoundation.org.

ABOUT THE W. P. CAREY SCHOOL OF BUSINESS

The W. P. Carey School of Business at Arizona State University is the largest and one of the top-ranked business schools in the United States. The school is internationally regarded for its research productivity and distinguished faculty members. Students come from more than 100 countries, and W. P. Carey is represented by alums in over 160 countries. Visit wpcarey.asu.edu.

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Media Contact: Kelli Nienaber, knienaber@leasefoundation.org

Equipment Leasing & Finance Foundation Announces 7th Annual “Day Of Giving” On March 14

24-Hour Fundraising Campaign Provides Individuals and Companies Opportunity to Give Back to the Equipment Finance Industry

Washington, DC, March 12, 2024 – The Equipment Leasing & Finance Foundation is designating Thursday, March 14, as a “Day of Giving” for everyone who has benefitted from the wide range of industry research, programs and resources the Foundation provides. The Foundation hopes to attract over 100 individual donors by collecting contributions from individual and corporate donors during the 24-hour marathon fundraiser. All giving levels are welcome, and all donations are 100% tax-deductible.

This is the seventh annual Day of Giving, which is intended to remind people of the lasting impact they can make when they support the Foundation’s mission to propel the equipment finance industry forward. The Day of Giving’s date has been moved up this year from previous years so donors can enjoy the Foundation’s benefits like early access to new research releases and recognition at events throughout the year.

The Day of Giving campaign supports the Foundation’s wide range of popular and new resources which are made possible entirely through individual and corporate donations, including:

A new end-user survey with detailed analysis of equipment acquisition and financing behavior, and a calculated estimate of equipment finance industry size that will be included in this year’s Equipment Leasing & Finance Industry Horizon Report.
Topical studies, including the recent “Fraud in the Equipment Leasing and Finance Industry,” “Future Supply Chain Impacts on the U.S. Equipment Leasing & Finance Industry,” the soon-to-be-released “Climate Finance: A Massive Opportunity for Equipment Finance,” and two studies out for proposal on artificial intelligence and the evolving roles of banks and independents.
Campus to Career programs to attract new and diverse student talent to the industry:
- Expanded scholarship program to ten $5,000 student scholarships
- Campus to Career presentations at colleges and universities
- Academic partnership with Arizona State University to build an equipment finance course curriculum
- Connecting students and employers through internship listings and resources.
Regular in-depth research like the Monthly Confidence Index, Equipment & Software Investment Momentum Monitor, Equipment Leasing & Finance U.S. Economic Outlook, and Journal of Lease Financing (JELF), all available for free download at the online Research Library.

“This Day of Giving is a great opportunity to acknowledge the profound impact the Foundation has on our professional lives and the future of our industry,” said Shari Lipski, Principal, ECS Financial Services, Inc., Foundation Trustee, and National Development Committee Chair. “Your 100% tax-deductible donation plays a critical role in advancing research, developing the next generation of industry leaders, and driving new insights and best practices that propel us forward.”

Donations can be made online at https://www.leasefoundation.org/giving/online/, or by check to the Equipment Leasing & Finance Foundation, 1625 Eye St NW, Suite 850, Washington, DC 20006.

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Equipment Finance Industry Confidence Higher in February

Washington, DC, February 22, 2024 – The Equipment Leasing & Finance Foundation (the Foundation) releases the February 2024 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) today. The index reports a qualitative assessment of both the prevailing business conditions and expectations for the future as reported by key executives from the $1 trillion equipment finance sector. Overall, confidence in the equipment finance market is 51.7, an increase from the January index of 48.6.

When asked about the outlook for the future, MCI-EFI survey respondent Jeffry Elliott, CLFP, President, Huntington Equipment Finance, said, “We believe there is a 50/50 chance of a recession this year, which will likely result in lower capex spending on equipment, at least in the first half or until interest rates decline. However, following the significant delay in equipment acquisitions last year, we still expect considerable activity this year, as equipment wears out and replacement can be delayed only so long. The speed of onshoring and reshoring also will determine the demand for acquiring equipment or capex. Fortunately, long-term growth prospects for the United States and North America are strong, and we think the largest-ever expansion in our nation’s history is on the horizon.”

February 2024 Survey Results:
The overall MCI-EFI is 51.7, an increase from the January index of 48.6.

When asked to assess their business conditions over the next four months, 10.7% of the executives responding said they believe business conditions will improve over the next four months, a decrease from 20.7% in January. 82.1% believe business conditions will remain the same over the next four months, up from 62.1% the previous month. 7.1% believe business conditions will worsen, a decrease from 17.2% in
7.1% of the survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, down from 13.8% in January. 78.6% believe demand will “remain the same” during the same four-month time period, up from 65.5% the previous month. 14.3% believe demand will decline, a decrease from 20.7% in January.
14.3% of the respondents expect more access to capital to fund equipment acquisitions over the next four months, up from 13.8% in January. 75% of executives indicate they expect the “same” access to capital to fund business, down from 75.9% last month. 10.7% expect “less” access to capital, up slightly from 10.3% the previous month.
When asked, 21.4% of the executives report they expect to hire more employees over the next four months, an increase from 6.9% in 71.4% expect no change in headcount over the next four months, down from 79.3% last month. 7.1% expect to hire fewer employees, down from 13.8% in January.
3.6% of the leadership evaluate the current U.S. economy as “excellent,” up from none the previous month. 89.3% of the leadership evaluate the current U.S. economy as “fair,” down from 93.1% in January. 7.1% evaluate it as “poor,” relatively unchanged from 6.9% last month.
17.9% of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, up from 13.8% in January. 67.9% indicate they believe the U.S. economy will “stay the same” over the next six months, an increase from 65.5% last month. 14.3% believe economic conditions in the U.S. will worsen over the next six months, a decrease from 20.7% the previous month.
In February, 21.4% of respondents indicate they believe their company will increase spending on business development activities during the next six months, an increase from 17.2% the previous month. 67.9% believe there will be “no change” in business development spending, up from 65.5% in January. 10.7% believe there will be a decrease in spending, down from 17.2% last month.

January 2024 MCI-EFI Survey Comment from Industry Executive Leadership:

Bank, Small Ticket
“The U.S. economy is in transition and that brings opportunity to the creative and solution-oriented equipment finance and leasing companies in our industry. Our ability to pivot, meet our customers’ needs, and quickly execute on opportunities will determine our success. The headwinds of rising bankruptcy filings, delinquency and overall portfolio performance trending to long term averages are a change to the incredible times our industry has had for over a decade. This shift will affect organizations’ commitment and harm some while helping others. I look forward to growth in 2024.” David Normandin, President and Chief Executive Officer, Wintrust Specialty Finance

ABOUT THE MCI

How is the MCI-EFI designed?
The survey consists of seven questions and an area for comments, asking the respondents’ opinions about the following:

Current business conditions
Expected product demand over the next four months
Access to capital over the next four months
Future employment conditions
Evaluation of the current U.S. economy
S. economic conditions over the next six months
Business development spending expectations
Open-ended question for comment

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Media Contact: Kelli Nienaber, knienaber@leasefoundation.org

Equipment Leasing & Finance Foundation Accepting Applications for 10 $5,000 Scholarships to Promote Careers in the Equipment Finance Industry

Washington, DC, February 5, 2024—The Equipment Leasing & Finance Foundation is accepting applications for its scholarship program for the 2024-2025 academic year. Up to 10 scholarships of $5,000 each will be awarded to full-time undergraduate or full-time graduate students interested in pursuing a career in the equipment finance industry who are majoring in business, economics, finance, or a related discipline.

This year marks five years since the launch of the Foundation scholarship program, which supports the Foundation’s mission to attract new and diverse talent to the industry. Nineteen students have received scholarships during the first four years of the program. The increase in the number of scholarships being awarded from five to 10 this year is the result of a donation from the Equipment Leasing and Finance Association (ELFA).

To be eligible for consideration for a scholarship in 2024, candidates must submit their applications online by May 10, 2024, and must:

Be a full-time undergraduate student, or full-time graduate student, as defined by the accredited educational institution they are attending;
Have declared his/her/their major course work to be in the field of business, economics, finance, or a related discipline; and
Have a minimum cumulative grade point average of 3.0.
Students with recommendations from professionals in the equipment finance industry will be given preference.

To learn more or to apply for a scholarship, visit https://www.leasefoundation.org/academic-programs/home/scholarship-program/.

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Media Contact: Kelli Nienaber, knienaber@leasefoundation.org

New Foundation Study Examines the Prevention, Detection, and Impact of Fraud on the Equipment Finance Industry

Washington, DC, January 29, 2024 – Increases of 10% or more in incidents of fraud types, including identity theft and first- and third-party borrower fraud, have occurred among equipment finance companies over the last two years. A new study, “Fraud in the Equipment Leasing and Finance Industry,” released by the Equipment Leasing & Finance Foundation (Foundation) analyzes fraud in the equipment leasing and finance industry with an examination of the multifaceted nature of fraud, its financial impacts, evolving challenges faced by lenders of various sizes, and solutions to address and mitigate fraud.

The study was commissioned by the Foundation and prepared by Kassem Consulting and Datos Insights. It utilizes a multipronged approach, including a survey of Equipment Leasing and Finance Association (ELFA) members, in-depth interviews with executives from varying sizes of lending institutions, and an analysis of current fraud trends.

Among the key findings of the study are

Fraud types and trends – The study identified various fraud types prevalent in the industry, including identity theft, use of legitimate credentials by criminal enterprises, first-party fraud by borrowing company owners, impersonation fraud, and fraudulent invoice creation, among others.
Financial impact – The financial toll of these frauds varies across small, medium, and large lenders. A notable percentage of respondents either do not track or are unaware of the specific financial impacts, indicating a gap in fraud management advancements and prevention.
Fraud detection and prevention techniques – Preventive strategies are vital to every company as they are exponentially more effective than investigative approaches. They include analyzing credit overextensions, scrutinizing bank statements, verifying state-issued documents, and employing third-party solutions for identity verification.
Institutional confidence and solutions – Institutions have a mixed level of confidence in their ability to manage fraud losses. Adopting advanced solutions like artificial intelligence (AI) and machine learning is seen as a future direction for more effective fraud mitigation.

“Fraud in the equipment leasing and finance industry is ever-changing, and this study is designed to help businesses meet the challenges to stay ahead of it,” said Valerie Gerard, Foundation Research Committee Chair and Co-CEO of The Alta Group. “The study reveals current fraud practices and comprehensive strategies, including types of solutions and advanced technologies companies can deploy to combat evolving fraud threats effectively.”

Download the full report at http://tinyurl.com/yn68hz6v.

All Foundation studies are available for free download from the Foundation’s online library at http://store.leasefoundation.org/.

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ABOUT THE FOUNDATION
The Equipment Leasing & Finance Foundation is a 501c3 non-profit organization that propels the equipment finance sector—and its people—forward through industry-specific knowledge, intelligence, and programs that contribute to industry innovation, individual careers, and the overall betterment of the equipment leasing and finance industry. The Foundation is funded through charitable individual and corporate donations. Learn more at www.leasefoundation.org.
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Media contact: Kelli Nienaber, knienaber@leasefoundation.org

Equipment Finance Industry Confidence Improves in January

Washington, DC, January 18, 2023 – The Equipment Leasing & Finance Foundation (the Foundation) releases the January 2024 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) today. The index reports a qualitative assessment of both the prevailing business conditions and expectations for the future as reported by key executives from the $1 trillion equipment finance sector. Overall, confidence in the equipment finance market is 48.6, an increase from the December index of 42.5.

When asked about the outlook for the future, MCI-EFI survey respondent David Normandin, President and Chief Executive Officer, Wintrust Specialty Finance, said, “I expect that Wintrust will have a good year in the market as we have stable liquidity, attractive cost of funds, and an engaged and motivated team. I expect to continue to see challenges in the overall economy as well as specific segments, and we are diversified and nimble to move to the opportunity. The leasing industry has historically performed better than other asset classes through tougher times because of the nimble and creative nature of the industry. I expect that the industry will come through this next couple years stronger having learned from our experiences.”

January 2024 Survey Results:
The overall MCI-EFI is 48.6, an increase from the December index of 42.5.

When asked to assess their business conditions over the next four months, 20.7% of the executives responding said they believe business conditions will improve over the next four months, an increase from 3.7% in December. 62.1% believe business conditions will remain the same over the next four months, down from 66.7% the previous month. 17.2% believe business conditions will worsen, a decrease from 29.6% in
13.8% of the survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, up from 3.7% in December. 65.5% believe demand will “remain the same” during the same four-month time period, down from 74.1% the previous month. 20.7% believe demand will decline, a decrease from 22.2% in December.
13.8% of the respondents expect more access to capital to fund equipment acquisitions over the next four months, up from 3.7% in December. 75.9% of executives indicate they expect the “same” access to capital to fund business, up from 74.1% last month. 10.3% expect “less” access to capital, down from 22.2% the previous month.
When asked, 6.9% of the executives report they expect to hire more employees over the next four months, a decrease from 18.5% in December. 79.3% expect no change in headcount over the next four months, up from 63% last month. 13.8% expect to hire fewer employees, down from 18.5% in December.
None of the leadership evaluate the current U.S. economy as “excellent,” unchanged from the previous month. 93.1% of the leadership evaluate the current U.S. economy as “fair,” up from 85.2% in December. 6.9% evaluate it as “poor,” down from 14.8% last month.
13.8% of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, up from 3.7% in December. 65.5% indicate they believe the U.S. economy will “stay the same” over the next six months, a decrease from 66.7% last month. 20.7% believe economic conditions in the U.S. will worsen over the next six months, a decrease from 29.6% the previous month.
In January, 17.2% of respondents indicate they believe their company will increase spending on business development activities during the next six months, an increase from 14.8% the previous month. 65.5% believe there will be “no change” in business development spending, down from 66.7% in December. 17.2% believe there will be a decrease in spending, down from 18.5% last month.

January 2024 MCI-EFI Survey Comment from Industry Executive Leadership:

Captive, Small Ticket
“We still see demand for light and medium-duty trucks to satisfy ever-growing e-commerce business. We also see thousands of light and medium-duty trucks waiting for bodies to be upfitted. When the body companies catch up with chassis awaiting upfitting, we will see a lot of opportunities for equipment finance companies in this sector over the next three to six months.” Jim DeFrank, EVP and Chief Operating Officer, Isuzu Finance of America, Inc.

ABOUT THE MCI

How is the MCI-EFI designed?
The survey consists of seven questions and an area for comments, asking the respondents’ opinions about the following:

Current business conditions
Expected product demand over the next four months
Access to capital over the next four months
Future employment conditions
Evaluation of the current U.S. economy
S. economic conditions over the next six months
Business development spending expectations
Open-ended question for comment

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Media Contact: Kelli Nienaber, knienaber@leasefoundation.org