Confidence in the equipment finance industry declined slightly in March following three months of growing confidence as recession and inflation woes continue.
The Monthly Confidence Index for the Equipment Finance Industry landed at 50.3 for March, down from 51.8 in February and 58.2 in March 2022. The Index surveys current conditions and future expectations from equipment finance sector executives conducted by the Equipment Leasing and Finance Foundation.
A growing number of executives are losing confidence that the equipment finance industry will improve over the next four months, as 10.7% of the executives responding said they believe business conditions will improve, a decrease from 16.1% in February, according to the survey.
Meanwhile, 57.1% of executives surveyed in March believe business conditions will remain the same over the next four months, down from 61.3% in February. The remaining 32.1% believe business conditions will worsen over the next four months, an increase from 22.6 % in February.
Transport industry feels pressure
Independent truckers, for one, are feeling the squeeze of tightening economic conditions, Todd Doan, chief financial officer of First Capital Business Finance told Equipment Finance News.
Business has “been dropping in terms of workloads for the clientele that we typically help, and that, combined with the higher rates or higher monthly payments, we see a lot of truckers not being able to afford their monthly payments,” he said. “It’s not bad, but it’s definitely slower than last year.”
First Capital Business Finance primarily works with businesses in the transportation industry, including independent truckers who are financing their own vehicles. The Tustin, Calif.-based company has seen a 20% to 25% drop in terms of people “picking up their trucks” from the dealership, Doan said.
C-suite foresees ‘no change’ in biz development spending
Executives also are less confident in spending on business development, as 39.3% of respondents indicated they believe their companies will increase spending during the next six months, down from 51.6% in February.
Still, 53.6% believe there will be “no change” in business development spending, up from 41.9% during February, while 7.1% believe there will be a decrease in spending, up from 6.5% last month.
Notably, the data for the March Confidence Index was gathered before the Silicon Valley Bank crisis that led to Signature Bank, the parent company of equipment financier Signature Financial, entering Federal Deposit Insurance Corp. receivership and other banking stocks declining, according to an Equipment Leasing and Finance Foundation representative.
