Posted March 18, 2021

Equipment finance industry confidence reaches highest level in three years

The Equipment Leasing & Finance Foundation releases the March 2021 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI); overall, confidence in the equipment finance market is 67.7, the highest level since April 2018.

 “We are relatively positive on domestic and global economic activity for this year, and likely next. Despite lingering disruptions, with the tailwinds of government stimulus, central bank liquidity, excess capacity, and pent-up demand, global economic growth may positively surprise in 2021. The big question that could change our mind would be a return of inflation, which would change the dovish nature of most global central banks. Higher inflation would lead to higher interest rates and less of an incentive for businesses to borrow and invest,” says David Drury, senior vice president and head of equipment finance, Fifth Third Bank.

March 2021 Survey Results:
The overall MCI-EFI is 67.7, an increase from the February index of 64.4.

When asked to assess their business conditions over the next four months, 50 percent of executives responding said they believe business conditions will improve over the next four months, up from 46.2 percent in February; 46.4 percent believe business conditions will remain the same over the next four months, unchanged from the previous month. Only 3.6 percent believe business conditions will worsen, a decrease from 7.7 percent in February.

Almost 43 (42.9) percent of the survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, 53.6 percent believe demand will remain the same during the same four-month time period, and 3.6 percent believe demand will decline, all relatively unchanged from February.

28.6 percent of the respondents expect more access to capital to fund equipment acquisitions over the next four months, up from 23.1 percent in February; 71.4 percent of executives indicate they expect the same access to capital to fund business, a decrease from 76.9 percent last month. None expect less access to capital, unchanged from the previous month.  

When asked, 42.9 percent of the executives report they expect to hire more employees over the next four months, up from 38.5 percent in February. 57.1 percent expect no change in headcount over the next four months, a decrease from 61.5 percent last month. None expect to hire fewer employees, unchanged from February.

Just 3.6 percent of the leadership evaluate the current U.S. economy as excellent, which is an increase from none the previous month; 78.6 percent of the leadership evaluate the current U.S. economy as fair, up from 76.9 percent in February. 17.9 percent evaluate it as poor, down from 23.1 percent last month.

A majority -- 60.7 percent -- of the survey respondents believe that U.S. economic conditions will get better over the next six months, an increase from 50 percent in February; 32.1 percent indicate they believe the U.S. economy will stay the same over the next six months, a decrease from 38.5 percent last month. Only 7.1 percent believe economic conditions in the U.S. will worsen over the next six months, down from 11.5 percent the previous month.

In March, 39.3 percent of respondents indicate they believe their company will increase spending on business development activities during the next six months, up from 30.8 percent last month; 60.7 percent believe there will be no change in business development spending, a decrease from 69.2 percent in February. None believe there will be a decrease in spending, unchanged from last month.

March 2021 MCI-EFI survey comments from industry executive leadership:

Bank, Middle Ticket
“The prospect of a broadly-vaccinated population should further push open state and local economies.” -- Adam Warner, president, Key Equipment Finance

Independent, Middle Ticket
“The vaccine rollout is now progressing quickly, and while some predict we won't see the end of this pandemic until year end, I believe everyone that wants a vaccine will be able to receive one by early May. This bodes well for the return of strong economic activity that will almost certainly boost capital spending significantly.” -- Bruce J. Winter, president, FSG Capital, Inc.

Independent, Large Ticket
“As COVID restrictions lift and companies have a clearer vision of future demand, it will help companies make more informed capex decisions.” -- Vincent Belcastro, group head syndications, Element Fleet Management

The COVID-19 Impact Survey of the Equipment Finance Industry will be reported on a quarterly basis in 2021. Additionally, questions will be revised to reflect longer-term effects of the pandemic’s impact on equipment finance companies going forward. If you wish to participate on behalf of your company in 2021, please contact Stephanie Fisher at to determine eligibility for inclusion in the survey.


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:
1.   Current business conditions
2.   Expected product demand over the next four months
3.   Access to capital over the next four months
4.   Future employment conditions
5.   Evaluation of the current U.S. economy
6.   U.S. economic conditions over the next six months
7.   Business development spending expectations
8.   Open-ended question for comment

Survey results are posted on the Foundation website,, 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.