ELFF: December Equipment Finance Industry Confidence Steady



Confidence in the equipment finance industry remained at 60.2 in December, matching the reading from November, according to the Equipment Leasing & Finance Foundation’s December 2015 Monthly Confidence Index.

When asked about the outlook for the future, MCI-EFI survey respondent Valerie Hayes Jester, president of Brandywine Capital Associates, said, “December activity is strong as we traditionally experience a last minute push to acquire equipment from procrastinators. Looking a bit further out we still see uncertainty as events continue to unfold, gas prices decrease and the presidential election continues to baffle.”

When asked to assess their business conditions over the next four months, 12.5% of responding executives said they believe business conditions will improve over the next four months, a decrease from 14.8% in November. An even 75% of respondents believe business conditions will remain the same over the next four months, an increase from 74.1% in November. Meanwhile, 12.5% believe business conditions will worsen, an increase from 11.1% the previous month.

“Application and funding volume continues to be steady. We are expecting little change in either direction,” said David T. Schaefer, CEO of Mintaka Financial. “Delinquencies are still in the historical low range. Growing originations is still the biggest challenge with the economy growing so slowly.”

As far as demand for leases and loans to fund capital expenditures, 8.3% of survey respondents believe such demand will increase over the next four months, a decrease from 22.2% in November.  The majority (79.2%) believe demand will remain the same during the same four-month time period, up from 66.7% the previous month, while 12.5% believe demand will decline, an increase from 11.1% who believed so in November.

Expectations for access to capital to fund equipment acquisitions increased with 25% of executives forecasting more over the next four months, an increase from 22.2% in November.

Confidence in the U.S. economy improved in December with 4.2% of the leadership evaluating the current U.S. economy as excellent, an increase from 3.7% last month and no respondents rating it as poor. However, only 8.3% of the survey respondents believe that U.S. economic conditions will get better over the next six months, a decrease from 18.5% who believed so in November, while 12.5% believe economic conditions in the U.S. will worsen over the next six months, an increase from 3.7% who believed so last month.

“The manufacturing segment of the U.S. economy has slowed substantially over the last several months,” said Thomas Jaschik, president of BB&T Equipment Finance. “This will have a direct impact on the equipment finance industry. I anticipate marginal growth, if any, for the first half of 2016.”


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