Equipment finance industry confidence inches up amid tariff impacts
Overall, confidence in the equipment finance market is 44.5, up from the April index of 41.9, and the second lowest index since December 2023.
The Equipment Leasing & Finance Foundation released its May 2025 Monthly Confidence Index for the Equipment Finance Industry May 20, 2025. 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.
When asked about the outlook for the future, MCI-EFI survey respondent Joseph Hines, Head of Equipment Finance, Trustmark Bank Equipment Finance, said, “Pipelines and funded business have picked up after a slow start to the year and a slower than expected year-end in 2024. Some of the uptick in new business may be a mix of new projects, maintenance capex and pulling purchases forward due to tariff fears and rising costs. Time will tell how much of the new business are purchases being accelerated, but we remain optimistic the tariff discussions and outcomes will be positive and a return to some normalcy in the market.”
May 2025 survey results:
The overall MCI-EFI is 44.5, up from the April index of 41.9.
- Business conditions - When asked to assess their business conditions over the next four months, 4 percent of the executives responding said they believe business conditions will improve over the next four months, a decrease from 15.4 percent in April and 52 percent believe business conditions will remain the same over the next four months, up from 26.9 percent the previous month. However, 44 percent believe business conditions will worsen, down from 57.7 percent in April.
- Capex demand – Eight percent of the survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, down from 11.5 percent in April while 44 percent believe demand will remain the same during the same four-month time period, up from 26.9 percent the previous month. Almost half (48 percent) believe demand will decline, a decrease from 61.5 percent in April.
- Access to capital – Just 4.2 percent of the respondents expect more access to capital to fund equipment acquisitions over the next four months, down from 7.7 percent in April while 95.8 percent of executives indicate they expect the same access to capital to fund business, up from 88.5 percent the previous month. None expect less access to capital, down from 3.9 percent in April.
- Employment - When asked, 24 percent of the executives report they expect to hire more employees over the next four months, an increase from 23.1 percent in April and 72 percent expect no change in headcount over the next four months, down from 73.1 percent last month. Only 4 percent expect to hire fewer employees, relatively unchanged from April.
- U.S. economy – None of the leadership evaluate the current U.S. economy as excellent, unchanged from April while 84 percent evaluate the economy as fair, down from 88.5 percent the previous month and 16 percent evaluate it as poor, up from 11.5 percent in April.
- Economic outlook – Twelve percent of the survey respondents believe that U.S. economic conditions will get better over the next six months, up from 7.7 percent in April and 44 percent indicate they believe the U.S. economy will stay the same over the next six months, up from 34.6 percent last month; 44 percent believe economic conditions in the U.S. will worsen over the next six months, a decrease from 57.7 percent the previous month.
- Business development spending – In May, 32 percent of respondents indicate they believe their company will increase spending on business development activities during the next six months, up from 19.2 percent the previous month and 64 percent believe there will be no change in business development spending, a decrease from 80.8 percent in April. Only 4 percent believe there will be a decrease in spending, up from none from last month.
May 2025 MCI-EFI survey comments from industry executive leadership:
Bank, Small Ticket
“As more trade partners come to the table, confidence in Trump’s aggressive trade policies increases. Combined with a bolstering of U.S. manufacturing, things should get better. The overall effect of tariffs is still being debated, but the consensus seems to be not as fatalistic as previously measured.” -- Charles Jones, senior vice president, 1st Equipment Finance, Inc.
“The high level of uncertainty is driving confidence levels lower. At the same time, actual volume has been strong. So long as companies continue their investment in their businesses and finance more of those investments, 2025 could be a good year for the industry.” -- David Normandin, president and chief executive officer, Wintrust Specialty Finance
Independent, Small Ticket
“There is stress shown by the strength of the credit profiles of the applicants we have received year to date. The sooner the tariff issues are resolved the sooner the economy will recover.” -- James D. Jenks, CEO, Global Finance and Leasing Services, LLC
Survey results are posted on the Foundation website, https://www.leasefoundation.org/industry-resources/monthly-confidence-index/. Details about the MCI, including who participates, how it’s designed, and the survey respondent demographics are also available there.
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