Covid Hammers Finance Outlook

May 14, 2020

Some 93 percent of equipment finance executives report offering payment deferrals to customers, according to the Equipment Leasing & Finance Foundation’s Covid-19 Impact Survey of the Equipment Finance Industry, conducted May 4-8.

Separately, the Foundation’s May Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) rose to 25.8 from 22.3 reported in April. The index serves as a barometer of prevailing business conditions and expectations for the future, according to the organization.

When asked to assess their business conditions over the next four months, 3.3 percent of executives responding said they believe business conditions will improve over the next four months, down from 6.9 percent in April. Ten percent say business conditions will remain the same over the next four months, an increase from none the previous month. About nine of 10 (86.7) say business conditions will worsen, a decrease from 93.1 percent in April.

Demand for leases and loans to fund capital expenditures will increase over the next four months, according to 6.7 percent of the survey respondents, relatively unchanged from April. Demand will decline, say 86.7 percent, a decrease from 89.7 percent in April.

None of the respondents expect more access to capital to fund equipment acquisitions over the next four months, unchanged from April. About a quarter, 26.7 percent, expect less access to capital, a decrease from 46.4% the previous month.

No respondents evaluated the current U.S. economy as “excellent,” unchanged from the previous month, and 90 percent evaluate it as “poor,” down from 100% last month.

One in five say that U.S. economic conditions will get “better” over the next six months, a decrease from 27.6 percent in April. Half say conditions will worsen, down from 65.5 percent the previous month.

Source: Equipment Leasing & Finance Foundation