Uncategorized Archives - Equipment Leasing & Finance Foundation

Equipment Finance Industry Confidence Steady in September

Washington, DC, September 21, 2023 – The Equipment Leasing & Finance Foundation (the Foundation) releases the September 2023 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 50.3, steady with the August index of 50.4.

When asked about the outlook for the future, MCI-EFI survey respondent Jonathan Albin, Chief Operating Officer, Nexseer Capital, said, “Overall there appears to be good momentum around capital investment, whether driven by infrastructure initiatives, emerging technologies, or onshoring. Barring the emergence of a severe economic threat, I believe this momentum will continue.”

September 2023 Survey Results:
The overall MCI-EFI is 50.3, steady with the August index of 50.4.

When asked to assess their business conditions over the next four months, 10.3% of the executives responding said they believe business conditions will improve over the next four months, an increase from 3.6% in August. 75.9% believe business conditions will remain the same over the next four months, down from 89.3% the previous month. 13.8% believe business conditions will worsen, an increase from 7.1% in August.
10.3% of the survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, relatively unchanged from 10.7% in August. 79.3% believe demand will “remain the same” during the same four-month time period, an increase from 78.6% the previous month. 10.3% believe demand will decline, also relatively unchanged from 10.7% in August.
13.8% of the respondents expect more access to capital to fund equipment acquisitions over the next four months, up from 7.1% in August. 72.4% of executives indicate they expect the “same” access to capital to fund business, down from 78.6% last month. 13.8% expect “less” access to capital, down from 14.3% the previous month.
When asked, 20.7% of the executives report they expect to hire more employees over the next four months, a decrease from 22.2% in August. 72.4% expect no change in headcount over the next four months, up from 70.4% last month. 6.9% expect to hire fewer employees, down from 7.4% in August.
None of the leadership evaluate the current U.S. economy as “excellent,” down from 3.6% the previous month. 89.7% of the leadership evaluate the current U.S. economy as “fair,” up from 85.7% in August. 10.3% evaluate it as “poor,” relatively unchanged from 10.7% last month.
6.9% of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, a decrease from 10.7% in August. 62.1% indicate they believe the U.S. economy will “stay the same” over the next six months, an increase from 60.7% last month. 31% believe economic conditions in the U.S. will worsen over the next six months, an increase from 28.6% the previous month.
In September, 24.1% of respondents indicate they believe their company will increase spending on business development activities during the next six months, down from 25% the previous month. 69% believe there will be “no change” in business development spending, up from 67.9% in August. 6.9% believe there will be a decrease in spending, relatively unchanged from 7.1% last month.

September 2023 MCI-EFI Survey Comment from Industry Executive Leadership:

Bank, Small Ticket
“Interest rates have hopefully stabilized. Demand should increase to account for year-end spending.” Charles Jones, Senior Vice President, 1^st Equipment Finance (FNCB Bank)

Independent, Small Ticket
“Inflation and the economy will improve when we return to energy independence.” 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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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: Charlie Visconage, cvisconage@leasefoundation.org

New Foundation Report Examines the Restaurant Sector and the Opportunities for Equipment Finance Companies

Washington, DC, September 18, 2023 – Over half of restaurant operators are planning to increase their equipment and supply budgets in 2023, and 67% plan to make kitchen equipment replacements, according to a new study released by the Equipment Leasing & Finance Foundation (Foundation). The report, “Vertical Market Outlook Series: Restaurants,” provides an outlook on the restaurant sector in the U.S., including key trends and developments impacting this sector over the next one to two years. It is the ninth release of the Foundation’s forward-looking Vertical Market Outlook Series designed to help readers recognize and understand opportunities and challenges that may affect their businesses.

The report was commissioned by the Foundation and prepared by global advertising, technology, and data company Big Village, which also produced the previous studies in the Vertical Market Outlook Series. The new study presents data and research from a variety of sources, and examines a range of issues, including:

Restaurant market landscape: definition and composition
Macroeconomic environment: labor, government regulations impacting restaurants, impact of COVID, inflation, supply chain, financing, and failures and bankruptcies
Trends: equipment, role of technology, design, innovative venues, dining trends, sustainability, and generational differences.
Case studies: AI adoption and Taco Bell Defy Concept

“The study does an excellent job of surveying the restaurant landscape, the wide variety of restaurants in operation that could benefit from equipment finance, and the economic and market trends affecting them,” said Tom Ware, Foundation Research Committee Chair. “As with the previous releases in this vertical market series, this study provides indispensable data and analyses for equipment finance professionals to use in their strategic planning.”

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

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: Charlie Visconage, cvisconage@leasefoundation.org

Equipment Finance Industry Confidence Improves Again in August

Washington, DC, August 17, 2023 – The Equipment Leasing & Finance Foundation (the Foundation) releases the August 2023 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 50.4, an increase from the July index of 46.4.

When asked about the outlook for the future, MCI-EFI survey respondent Dave Fate, CEO, Stonebriar Commercial Finance, said, “In spite of significant turmoil in the U.S. banking sector, including multiple downgrades and warnings from the rating agencies, as well as unprecedented interest rate increases over the past year, the equipment leasing and finance industry continues to persevere. Secured equipment loans and leases continue to outperform every other asset class. I would expect our industry to continue to deploy much-needed capital—which serves as a catalyst for the U.S. economy—across a diverse set of industries across the credit spectrum. Stonebriar continues to thrive in this environment with year-to-date originations through July 31 of $1.26 billion, up 28% year over year.”

August 2023 Survey Results:
The overall MCI-EFI is 50.4, an increase from the July index of 46.4.

When asked to assess their business conditions over the next four months, 3.6% of the executives responding said they believe business conditions will improve over the next four months, a decrease from 7.7% in July. 89.3% believe business conditions will remain the same over the next four months, up from 65.4% the previous month. 7.1% believe business conditions will worsen, a decrease from 26.9% in July.
10.7% of the survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, an increase from 7.7% in July. 78.6% believe demand will “remain the same” during the same four-month time period, an increase from 69.2% the previous month. 10.7% believe demand will decline, down from 26.7% in July.
7.1% of the respondents expect more access to capital to fund equipment acquisitions over the next four months, down from 7.7% in July. 78.6% of executives indicate they expect the “same” access to capital to fund business, up from 76.9% last month. 14.3% expect “less” access to capital, down from 15.4% the previous month.
When asked, 22.2% of the executives report they expect to hire more employees over the next four months, an increase from 15.4% in July. 70.4% expect no change in headcount over the next four months, down from 76.9% last month. 7.4% expect to hire fewer employees, down slightly from 7.7% in July.
3.6% of the leadership evaluate the current U.S. economy as “excellent,” relatively unchanged from 3.9% the previous month. 85.7% of the leadership evaluate the current U.S. economy as “fair,” up from 80.8% in July. 10.7% evaluate it as “poor,” a decrease from 15.4% last month.
10.7% of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, a decrease from 11.5% in July. 60.7% indicate they believe the U.S. economy will “stay the same” over the next six months, an increase from 53.9% last month. 28.6% believe economic conditions in the U.S. will worsen over the next six months, a decrease from 34.6% the previous month.
In August, 25% of respondents indicate they believe their company will increase spending on business development activities during the next six months, down from 26.9% the previous month. 67.9% believe there will be “no change” in business development spending, up from 61.5% in July. 7.1% believe there will be a decrease in spending, down from 11.5% last month.

August 2023 MCI-EFI Survey Comment from Industry Executive Leadership:

Bank, Small Ticket
“Hanmi’s Leasing Department continues to see steady demand for its funding services and as rates have started to stabilize, pricing has become less of an issue. We are fortunate to have long standing partners that are loyal and experienced originators. Increased delinquency and default rates from recent historic lows have our attention as potential concerns and we continue to monitor our portfolio closely.” Mike Coon, CLFP, First Vice President – Portfolio Manager, Hanmi Bank

Independent, Middle Ticket
“In the past three years, our industry was directly affected by three major issues: Covid, the unprecedented speed and size of Fed rate hikes, and the unexpected fallout from deposit stickiness in the banking industry. After each occurrence, the confidence index for our industry dropped and then after a few months started to recover. What this tells us is that we aren’t immune to these strong forces, but after they happen our industry reacts and finds a way to deal with them. This past resilience and agility are what give me confidence in the near-term future of our industry. There remain macro forces out there that we cannot control which could potentially impact every industry. These include an escalation of the war in Ukraine, further aggressive rate moves by the Fed, and the potential crisis involving loan refinancing for commercial office buildings. All of these are big unknowns, but if the past is a guidepost for the future, our industry will find a way to succeed.” Mike Rooney, Chief Executive Officer, Verdant Commercial Capital LLC

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
U.S. economic conditions over the next six months
Business development spending expectations
Open-ended question for comment

JOIN THE CONVERSATION
Twitter: https://twitter.com/LeaseFoundation
LinkedIn: https://www.linkedin.com/company/10989281/
Vimeo: https://vimeo.com/elffchannel

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Media Contact: Charlie Visconage, cvisconage@leasefoundation.org

Q3 2023 Equipment Leasing & Finance Industry Snapshot Now Available

The Equipment Leasing & Finance Foundation has released the Q3 2023 Equipment Leasing & Finance Industry Snapshot, an indispensable information resource for industry participants. Designed for use in executive briefings and presentations, the presentation slide deck summarizes the current conditions and projections for the U.S. economy and equipment finance industry with clear, easy-to-digest charts and short narratives of key trends.

Among the range of details in the Q3 Snapshot:

The Foundation projects that the U.S. economy will grow by 1.6% in 2023 given stronger-than-expected growth in Q1.
- Growth in Q1 was broad-based, fueled by consumer and government spending, net exports, and business investment.
- While the economy is still above water, the Foundation continues to expect a recession to begin before year end.

Economic tailwinds for growth in 2023 include:
- A strong labor market, which added over 1.7 million jobs in the first half of 2023 and continues to exceed expectations and fuel consumer spending.
- A manufacturing construction spending boom that indicators suggest is likely to continue boosted by new federal policy.

Economic headwinds include:
- A credit crunch resulting from the high-profile bank failures in the spring that led many small and mid-sized banks to tighten lending standards. Tightening lending standards are likely to have broad-based effects on the U.S. economy.
- A global economic slowdown due to many of the same factors that have plagued the U.S. economy in recent months.

Factors to Watch
- Have we turned the corner on inflation? Headline inflation softened significantly in the first half of 2023, easing to 3.0% year over year in June. However, core inflation is still well above the Fed’s target, and the Foundation expects headline inflation to rise to around 4.0% later this year, triggering more tightening from the Fed.

Housing market rebound. The housing market has dragged on U.S. economic growth since the Fed began raising rates. However, over the last 3–6 months, there have been some positive signs. Time will tell if the housing market recovery will sustain itself, particularly if inflation proves stickier than hoped and the Fed raises rates later this year.

Equipment and software investment is expected to grow at a 0.9% pace in 2023.
- While equipment and software investment appears to have improved in Q2 after weaker-than-expected performance in Q1, it is expected to ease in the second half of 2023 as businesses pull back on investment due to higher interest rates and a slowing economy.
- Most equipment verticals are below their historical average, suggesting that the climate for investment growth is likely to remain weak in the near term.

New business volume growth reported in ELFA’s Monthly Leasing and Finance Index was up 1.1% year over year, and 0.9% year to date in May, well below the pace needed to keep up with inflation. High interest rates and tightening lending standards are likely contributing to the sluggishness, and growth remains negative in real terms.

Prepared by Keybridge Research and updated quarterly, the snapshot is available for free download at https://www.leasefoundation.org/industry-resources/industry-snapshot/

Media contact: Charlie Visconage, cvisconage@leasefoundation.org

Foundation Announces Scholarship Awards to Five Students

Washington, DC, July 25, 2023–The Equipment Leasing & Finance Foundation (Foundation) announces that five outstanding students are recipients of The Equipment Leasing & Finance Foundation Scholarship, a program for students interested in potentially pursuing a career in the equipment finance industry. Each student will receive a scholarship of $5,000 for the 2023-2024 academic year. The Equipment Leasing & Finance Foundation Scholarship is part of the Foundation’s Academic Outreach Program.

The scholarship recipients are:

Kyle Bansa, a senior at Towson University studying financial economics and business analytics. Set to graduate later this year, he is currently a summer intern at Bank of America Merrill Lynch part of their Wealth Management Summer Analyst program.
Lily Chen, a junior at the Massachusetts Institute of Technology majoring in finance. She intends to pursue a career in equipment finance with a focus on innovation around blockchain and AI.
Quincy Ewudzi-Acquah, a senior at Clark Atlanta University studying business administration and finance. Currently a summer intern at Adient, he also serves as a member of the HBCU Ambassador Leadership Program and as a Morehouse Business Associate.
Susan Kalinay, pursuing a Master of Business Administration at Wilkes University in Pennsylvania, is set to graduate in 2024. She is also Equipment Finance Operations Coordinator at 1st Equipment Finance – FNCB Bank working in operations and sales support.
Connor Schwob, a senior at St. John’s University in Minnesota, is studying global business leadership and data analytics. He is currently a product development intern at Optum, part of UnitedHealth Group.

“I’m delighted to congratulate this year’s Foundation scholarship recipients and pleased to encourage their academic pursuits,” said Donna Yanuzzi, Foundation Trustee and Academic Outreach Committee Chair, and Director of Equipment Finance, 1^st Equipment Finance (FNCB Bank). “The Foundation is committed to developing future talent in equipment finance, and the scholarship program is a great way to encourage new participants to join our rewarding, innovative and supportive industry.”

The Foundation scholarship program is an outgrowth of the success of the Foundation’s Guest Lecture Program, a long-standing component of its Academic Outreach Program, in which industry professionals volunteer to lecture at colleges and universities about the equipment finance industry and its possible career paths.

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: Charlie Visconage, cvisconage@leasefoundation.org

Equipment Finance Industry Confidence Higher in July

Washington, DC, July 20, 2023 – The Equipment Leasing & Finance Foundation (the Foundation) releases the July 2023 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 46.4, an increase from the June index of 44.1.

When asked about the outlook for the future, MCI-EFI survey respondent David Normandin, President and Chief Executive Officer, Wintrust Specialty Finance, said, “The equipment leasing and finance industry as a whole is relatively nimble. That is and will continue to be tested this year. I am confident that the industry will step up to the challenges and create solutions to meet the needs of our partners and customers.”

July 2023 Survey Results:
The overall MCI-EFI is 46.4, an increase from the June index of 44.1.

When asked to assess their business conditions over the next four months, 7.7% of the executives responding said they believe business conditions will improve over the next four months, an increase from 3.3% in June. 65.4% believe business conditions will remain the same over the next four months, down from 73.3% the previous month. 26.9% believe business conditions will worsen, an increase from 23.3% in June.
7.7% of the survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, an increase from 6.7% in June. 69.2% believe demand will “remain the same” during the same four-month time period, an increase from 66.7% the previous month. 23.1% believe demand will decline, down from 26.7% in June.
7.7% of the respondents expect more access to capital to fund equipment acquisitions over the next four months, up from 6.7% in June. 76.9% of executives indicate they expect the “same” access to capital to fund business, unchanged from last month. 15.4% expect “less” access to capital, down from 16.7% the previous month.
When asked, 15.4% of the executives report they expect to hire more employees over the next four months, an increase from 13.3% in June. 76.9% expect no change in headcount over the next four months, unchanged from last month. 7.7% expect to hire fewer employees, down from 10% in June.
3.9% of the leadership evaluate the current U.S. economy as “excellent,” up from none the previous month. 80.8% of the leadership evaluate the current U.S. economy as “fair,” down from 83.3% in June. 15.4% evaluate it as “poor,” a decrease from 16.7% last month.
11.5% of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, an increase from 6.7% in June. 53.9% indicate they believe the U.S. economy will “stay the same” over the next six months, an increase from 40% last month. 34.6% believe economic conditions in the U.S. will worsen over the next six months, a decrease from 53.3% the previous month.
In July, 26.9% of respondents indicate they believe their company will increase spending on business development activities during the next six months, down from 30% the previous month. 61.5% believe there will be “no change” in business development spending, up from 56.7% in June. 11.5% believe there will be a decrease in spending, down from 13.3% last month.

July 2023 MCI-EFI Survey Comment from Industry Executive Leadership:

Independent, Small Ticket
“For most companies, revenues continue to come in, albeit a little slower and financing their capital equipment acquisitions protects their cash flow.” James D. Jenks, CEO, Global Finance and Leasing Services, LLC

Bank, Middle Ticket
“Key Equipment Finance remains very encouraged by our clients’ financial performance as they navigate the uncertain macroeconomic climate. We have not seen any meaningful credit degradation in our portfolios, and we expect that to hold up for the remainder of the year.” Adam Warner, President, Key Equipment 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

JOIN THE CONVERSATION
Twitter: https://twitter.com/LeaseFoundation
LinkedIn: https://www.linkedin.com/company/10989281/
Vimeo: https://vimeo.com/elffchannel

###

Media Contact: Charlie Visconage, cvisconage@leasefoundation.org

Q3 Update to the 2023 Economic Outlook Forecasts 0.9% Expansion in Equipment and Software Investment and 1.6% GDP Growth as Recession Looms

Washington, DC, July 19, 2023 – High interest rates and slowing economic growth will continue to impact equipment and software investment growth as the year progresses, according to the Equipment Leasing & Finance Foundation’s Q3 update to the 2023 Equipment Leasing & Finance U.S. Economic Outlook. The report, released today, reveals that economic growth in Q1 was stronger than initially estimated, leading the Foundation to raise its annual U.S. GDP forecast to 1.6%. However, after investment contracted in the first quarter — and with a potential recession still looming on the horizon — the Foundation revised its annual estimate for equipment and software investment growth down slightly, to 0.9%.

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.

Nancy Pistorio, Foundation Chair and President of Madison Capital LLC, said, “The U.S. economy posted surprisingly solid growth in Q1, and labor markets have been unexpectedly resilient to higher interest rates. Additionally, after a poor first quarter for equipment and software investment growth, it appears that the segment may have picked up a bit in Q2, and several of the Foundation’s forward-leaning Momentum Monitors are in a better position today than they were earlier in the year. Nevertheless, as the report makes clear, the economic tide still looks to be going out: core inflation is still above target, financial stress is rising, and labor markets are likely to weaken substantially later this year as the effect of high interest rates sets in. While a so-called ‘soft landing’ is still possible, a mild recession beginning by year’s end is still the most likely base-case scenario.”

Highlights from the Q3 update to the 2023 Outlook include:

The U.S. economy has been stronger than anticipated driven by a robust labor market and resilient U.S. consumers. Inflation has improved but remains above target, and a looming credit crunch and slower global economic growth remain significant headwinds.
Equipment and software investment growth is struggling amid volatile industry conditions at the midway point of 2023 after decreasing by 4.5% in Q1. Although conditions may have improved somewhat in Q2, they are far from ideal. As a result, the annualized growth forecast for equipment and software investment is just 0.9%.
The manufacturing sector’s measures of activity have held firm in recent months with solid production and sales in Q2. However, several leading indicators point to weakness later this year, including reduced demand from abroad, though the recent boom in manufacturing construction is a notable exception that should continue.
Main Street has held its own during one of the most turbulent periods in recent economic history. However, a growing share of small firms are reporting weaker sales, tepid capital investment plans, and rising borrowing costs. The looming credit crunch expected later in 2023 is likely to disproportionately impact small businesses.
The Federal Reserve held interest rates steady at its most recent meeting, the first such pause in the current tightening cycle. However, Chair Powell and the FOMC have made it clear that their work is not done and that additional rate hikes are likely later this year.

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 one vertical is expanding, five are recovering/emerging, and six verticals are weakening. Over the next three to six months, year over year:

Agriculture machinery investment growth is likely to remain in negative territory.
Construction machinery investment growth will decelerate.
Materials handling equipment investment growth will likely remain subdued.
All other industrial equipment investment growth is likely to remain muted.
Medical equipment investment growth should improve.
Mining and oilfield machinery investment growth may slow, but should remain positive.
Aircraft investment growth will continue to slow.
Ships and boats investment growth could decelerate sharply.
Railroad equipment investment growth may decelerate, but will likely remain positive.
Trucks investment growth may weaken but should remain positive.
Computers investment growth could begin to bounce back.
Software investment growth will continue to decelerate but should remain positive.

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 Q3 report is the second update to the 2023 Economic Outlook, and will be followed by one more quarterly update before the publication of the 2024 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/.

JOIN THE CONVERSATION
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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 individual and corporate donations. Learn more at www.leasefoundation.org.

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Media Contact: Charlie Visconage, cvisconage@leasefoundation.org

New Foundation Survey Reveals Impact of Liquidity Issues on the Equipment Finance Industry

Washington, DC, June 28, 2023 – The equipment finance industry is seeing a negative impact on business conditions due to recent bank failures and their attendant liquidity issues, according to the results of a new survey released by the Equipment Leasing & Finance Foundation (Foundation). The survey, “Impact of Bank Liquidity on the Equipment Finance Industry,” reveals that despite the majority of lenders (56%) expecting originations to increase in 2023, substantially more banks and captives feel that the impact of recent events was negative rather than positive for them. Independents, however, believe they will have more opportunities if banks tighten or restrict their small business lending activities. The survey was developed to track the immediate and long-term impact of the recent bank liquidity crises on equipment finance companies on a variety of factors.

Key Findings
Among the survey highlights, which break out the results by lender type, are:

Overall impact. As a result of the recent liquidity crisis, 44% of banks expect a negative impact, 38% expect no impact, and 19% expect a positive impact. 37% of captives expect a negative impact and 63% expect no impact, while independents are equally split on positive, negative and no impact from liquidity issues.
Deposits. 58% of bank respondents believe negative changes in deposit levels would reduce new transaction and funding activity. An equal number of respondents expect deposits at their banks to increase (36%) or remain the same (36%).
Originations. 52% of banks, 70% of independents, and 33% of captives expect originations volume to increase this year.
Cost of capital. All types of lenders expect their cost of capital to increase: 94% of banks, 79% of independents, and 67% of captives.
Spreads. 63% of banks and 39% of independents believe their margin requirement or credit spread will increase, while only 25% of captives believe so.
Duration of liquidity stress. 33% of all respondents said that liquidity stress is not currently an issue, 29% said it will be an issue for less than one year, 19% said it will be an issue for more than a year, 14% said less than six months, and 4% said less than three months.
Syndication markets. 58% of Banks said they would reduce their purchasing, but only 15% said they would reduce their selling, likely foretelling a market imbalance with more sellers than buyers, though the difference was less extreme when all lender types are counted.

“This survey makes clear that almost all independents expect to benefit by recent events, while most banks, particularly smaller banks, and captives, expect a negative impact, at least for the short-to-medium term,” said Tom Ware, Foundation Research Committee Chair. “It also demonstrates the Foundation’s continued dedication to its mission to provide relevant, future-focused research data for the betterment of the equipment finance industry.”

Survey responses were collected from 78 equipment finance company executives during April 2023. Of the responses, 33 were from banks, 33 from independents, and 12 from captives.

Read the full survey results at https://www.leasefoundation.org/industry-resources/liquidity-survey/.

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: Charlie Visconage, cvisconage@leasefoundation.org

Equipment Finance Industry Confidence Ticks Up in June

Washington, DC, June 22, 2023 – The Equipment Leasing & Finance Foundation (the Foundation) releases the June 2023 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 44.1, an increase from the May index of 40.6.

When asked about the outlook for the future, MCI-EFI survey respondent Jonathan Albin, Chief Operating Officer, Nexseer Capital, said, “We believe that as banks’ senior credit facility lending tightens, there will be more opportunity for equipment lessors to supply supplemental capital. We are seeing evidence of this today.”

June 2023 Survey Results:
The overall MCI-EFI is 44.1, an increase from the May index of 40.6.

When asked to assess their business conditions over the next four months, 3.3% of the executives responding said they believe business conditions will improve over the next four months, an increase from none in May. 73.3% believe business conditions will remain the same over the next four months, up from 51.9% the previous month. 23.3% believe business conditions will worsen, a decrease from 48.2% in May.
6.7% of the survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, an increase from 3.6% in May. 66.7% believe demand will “remain the same” during the same four-month time period, an increase from 53.6% the previous month. 26.7% believe demand will decline, down from 42.9% in May.
6.7% of the respondents expect more access to capital to fund equipment acquisitions over the next four months, down from 10.7% in May. 76.7% of executives indicate they expect the “same” access to capital to fund business, an increase from 75% last month. 16.7% expect “less” access to capital, up from 14.3% the previous month.
When asked, 13.3% of the executives report they expect to hire more employees over the next four months, a decrease from 17.9% in May. 76.7% expect no change in headcount over the next four months, an increase from 67.9% last month. 10% expect to hire fewer employees, down from 14.3% in May.
None of the leadership evaluate the current U.S. economy as “excellent,” unchanged from the previous month. 83.3% of the leadership evaluate the current U.S. economy as “fair,” down from 85.7% in May. 16.7% evaluate it as “poor,” an increase from 14.3% last month.
6.7% of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, an increase from 3.6% in May. 40% indicate they believe the U.S. economy will “stay the same” over the next six months, an increase from 32.1% last month. 53.3% believe economic conditions in the U.S. will worsen over the next six months, a decrease from 64.3% the previous month.
In June 30% of respondents indicate they believe their company will increase spending on business development activities during the next six months, down from 35.7% the previous month. 56.7% believe there will be “no change” in business development spending, up from 53.6% in May. 13.3% believe there will be a decrease in spending, up from 10.7% last month.

June 2023 MCI-EFI Survey Comments from Industry Executive Leadership:

Bank, Small Ticket
“The equipment leasing and finance industry is resilient and will weather the liquidity shortage that we are currently in, as well as the looming recession. There are and will continue to be opportunities that exist in this environment, and nimble organizations that are capitalized will be well positioned to grow during this period of uncertainty.” David Normandin, President and Chief Executive Officer, Wintrust Specialty Finance

Bank, Middle Ticket
“Businesses need equipment to operate. While business expansion may be limited, the need to replace equipment will remain. Our credit criteria has not changed.” Charles Jones, Senior Vice President, 1^st Equipment Finance (FNCB Bank)

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
U.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 Announces 6th Annual “Day Of Giving” On June 6

24-Hour Fundraising Campaign Provides Individuals and Companies Opportunity to Invest in the Future of the Equipment Finance Industry

Washington, DC, June 5, 2023 – The Equipment Leasing & Finance Foundation is designating tomorrow, June 6, as a “Day of Giving” for everyone who has benefitted from the wide range of industry research, programs, and resources the Foundation provides. This is the sixth annual Day of Giving, which is intended to attract new donors and remind people of the lasting impact they and their companies make when they support the Foundation’s mission to propel the equipment finance industry forward. The Foundation hopes to attract new and returning donors and raise $85,000 during its 24-hour marathon fundraiser. All giving levels are welcome, and all donations are 100% tax-deductible.

As part of the Day of Giving campaign, the Foundation is highlighting popular and new resources it has released and programs it has conducted over the last year, made possible entirely through individual and corporate donations. Among the wide range are:

Industry studies, including the Equipment Leasing & Finance Industry Horizon Report, “Specialized Apps, Software, and Information Services for the Equipment Leasing & Finance Industry,” and “Vertical Market Outlook Series: Franchise.”
Podcast episodes on risk management and a newly launched vertical market podcast series.
Academic Programs designed to attract new and diverse talent that is the future of our industry. Among them are the Equipment Leasing & Finance Foundation Scholarship Program, which awards five scholarships of $5,000 each annually to students interested in pursuing a career in the equipment finance industry. The Guest Lecture Program provides an opportunity for industry participants to share their stories and introduce students to the equipment finance industry.
Topical and economic research studies, including the quarterly-updated 2023 Equipment Leasing & Finance U.S. Economic Outlook. All are available for free download at the online Research Library.
The Journal of Lease Financing (JELF), which welcomes original submissions on industry topics.

“The Day of Giving is an incredible opportunity to showcase and demonstrate support for the Foundation’s mission, which benefits everyone in the equipment finance 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 providing a diverse range of resources about our industry that are not accessible elsewhere.”

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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Media contact: Charlie Visconage, cvisconage@leasefoundation.org