Equipment lender confidence jumps amid pent-up demand

Equipment lender confidence bounced back this month as more businesses put an end to their wait-and-see approach amid tariff uncertainty. 

The Equipment Leasing and Finance Foundation’s (ELFF) Monthly Confidence Index, released June 16, reached 58.2 in June, up from 44.5 in May and a 19-month low of 41.9 in April.  

With businesses having a better idea of where tariffs will land, “it’s very plausible we’ll see pent-up demand begin to release, backlogged or postponed purchases resurface, and a shift in financing behavior,” Jim DeFrank, executive vice president and chief operating officer at Isuzu Finance of America, stated in the report. 

“Leasing in particular could spike as companies look to preserve cash while still upgrading assets,” he said. 

Nearly 30% of roughly 30 equipment financiers expect business conditions to improve over the next four months, up from 4% in May, according to the report. 

The percentage of lenders expecting increased loan and lease demand over the next month rose to 29.6% from 8% in May. Roughly 18% anticipate greater access to capital over the next four months, up from 4.2%.  

Despite tariff pessimism easing, it’s still important for borrowers to have a good story for lenders as to why they want to purchase a new piece of equipment, Kirk Mann, executive vice president and head of transportation at Mitsubishi HC Capital America, told Equipment Finance News.  

If a borrower is seeking a replacement unit, “and we don’t see any degradation in the financial performance, that’s a no brainer,” he said. “If it’s an additional unit, we need to understand why. … When it comes to accessing credit, with any lender right now, you need a pretty good story. … Help me understand why buying this unit is a better deal for you.” 

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