Monthly Confidence Index – Equipment Finance Industry (MCI-EFI) – Febuary 2022

February 2022 Survey Results

The overall MCI-EFI is 61.8, easing from the January index of 63.9

• When asked to assess their business conditions over the next four months, 24.1% of executives responding said they believe business conditions will improve over the next four months, a decrease from 25.9% in January. 69% believe business conditions will remain the same over the next four months, down from 70.4% the previous month. 6.9% believe business conditions will worsen, an increase from 3.7% in January.
• 24.1% of the survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, down from 25.9% in January. 72.4% believe demand will “remain the same” during the same four-month time period, an increase from 70.4% the previous month. 3.5% believe demand will decline, unchanged from January.
• 17.2% of the respondents expect more access to capital to fund equipment acquisitions over the next four months, down from 21.4% in January. 82.8% of executives indicate they expect the “same” access to capital to fund business, an increase from 78.6% last month. None expect “less” access to capital, unchanged from the previous month.
• When asked, 44.8% of the executives report they expect to hire more employees over the next four months, up from 39.3% in January. 55.2% expect no change in headcount over the next four months, a decrease from 60.7% last month. None expect to hire fewer employees, unchanged from January.
• 10.3% of the leadership evaluate the current U.S. economy as “excellent,” a decrease from 14.8% the previous month. 86.2% of the leadership evaluate the current U.S. economy as “fair,” up from 81.5% in January. 3.5% evaluate it as “poor,” unchanged from last month.
• 24.1% of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, a decrease from 29.6% in January. 58.6% indicate they believe the U.S. economy will “stay the same” over the next six months, a decrease from 63% last month. 17.2% believe economic conditions in the U.S. will worsen over the next six months, an increase from 7.4% the previous month.
• In February 44.8% of respondents indicate they believe their company will increase spending on business development activities during the next six months, down from 50% the previous month. 51.7% believe there will be “no change” in business development spending, up from 50% in January. 3.5% believe there will be a decrease in spending, up from none last month.

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February 2022 Survey Comments from Industry Executive Leadership

Bank, Small Ticket

“I see volatility in the market that will provide opportunities for companies nimble enough to embrace them and quick enough to take advantage.” David Normandin, CLFP, President and CEO, Wintrust Specialty Finance

Bank, Middle Ticket

“We’re in an interesting period as we wait to see what the Fed will do. We all know rates will go up, but by how much? Customers are looking at their options, and the savvy ones are looking to lock in today’s low rates for longer term leases.” Michael Romanowski, President, Farm Credit Leasing

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Survey Demographics

Market Segment

• Bank 55.2%
• Captive 17.2%
• Independent 27.6%

Market Segments Based on Transaction Size of New Business Volume

• Large-Ticket (New Business Volume Avg. Transaction Size Over $5 Million) 13.8%
• Middle-Ticket (New Business Volume Avg. Transaction Size of $250,000 – $5 Million) 48.3%
• Small-Ticket (New Business Volume Avg. Transaction Size of $25,000 – $249,999) 37.4%
• Micro-Ticket (New Business Volume Avg. Transaction Less Than $25,000) 0%

Organization Size

• Under $50 Million 10.3%
• $50 Million – $250 Million 20.7%.
• $250 Million – $1 Billion 24.1%
• Over $1 Billion 48.8%

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