The Equipment Leasing & Finance Foundation released the February 2025 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI). Overall, confidence in the equipment finance market eased to 66.9, down from the January index of 69.6, after three consecutive months of increases. The index reports a qualitative assessment of both the prevailing business conditions and future expectations as reported by key executives from the $1.3 trillion equipment finance sector.
“I am optimistic about the opportunities that may happen in 2025. Business confidence is strong, which will lead to additional investment into capital equipment,” David Normandin, CLFP, president and CEO of Wintrust Specialty Finance, said. “Additionally, while inflation is still higher than desired, it is a marked improvement from the recent past. With that said, delinquency and credit quality remain a challenge with bankruptcy rates continuing to rise and stress in consumer auto and credit card debt. 2025 may not be an easy year, but there will be opportunities to leverage if you are nimble and creative in solving challenges.”
February 2025 Survey Results:
The overall MCI-EFI is 66.9, down from the January index of 69.6.
- Business Conditions: When asked to assess their business conditions over the next four months, 53.6% of the executives responding said they believe business conditions will improve over the next four months, a decrease from 57.1% in January. 35.7% believe business conditions will remain the same over the next four months, down from 38.1% the previous month. 10.7% believe business conditions will worsen, up from 4.8% in January.
- CapEx Demand: 46.4% of the survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, down from 47.6% in January. 50% believe demand will “remain the same” during the same four-month time period, up from 47.6% the previous month. 3.6% believe demand will decline, a decrease from 4.8% in January.
- Access to Capital: 25% of the respondents expect more access to capital to fund equipment acquisitions over the next four months, down from 28.6% in January. 75% of executives indicate they expect the “same” access to capital to fund business, up from 71.4% the previous month. None expect “less” access to capital, unchanged from January.
- Employment: When asked, 35.7% of the executives report they expect to hire more employees over the next four months, a decrease from 47.6% in January. 64.3% expect no change in headcount over the next four months, up from 52.4% last month. None expect to hire fewer employees, unchanged from January.
- U.S. Economy: 3.6% of the leadership evaluate the current U.S. economy as “excellent,” down from 9.5% the previous month. 92.9% evaluate the economy as “fair,” up from 85.7% in January. 3.6% evaluate it as “poor,” down from 4.8% last month.
- Economic Outlook: 48.2% of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, down from 52.4% in January. 40.7% indicate they believe the U.S. economy will “stay the same” over the next six months, down from 47.6% last month. 11.1% believe economic conditions in the U.S. will worsen over the next six months, an increase from none the previous month.
- Business Development Spending: In February, 39.3% of respondents indicate they believe their company will increase spending on business development activities during the next six months, up from 38.1% the previous month. 60.7% believe there will be “no change” in business development spending, a decrease from 61.9% in January. None believe there will be a decrease in spending, unchanged from last month.
February 2025 MCI-EFI Survey Comments from Industry Executive Leadership
Bank, Small Ticket
“The Trump Administration has taken a hard line on economic relations,” Charles Jones, senior vice president of 1st Equipment Finance, said. “Assuming this will bolster negotiations, hope is building that the result will be a stronger U.S. economy.”
Independent, Small Ticket
“With this administration, we expect a gradual improvement in business conditions into the foreseeable future,” James D. Jenks, CEO of Global Finance and Leasing Services, said. We also expect the performance of portfolios to gradually improve as well.”
