Equipment finance confidence dips amid high rates, inflation

Macroeconomic challenges dampened equipment lender sentiment this month despite strong demand for equipment overall.

The Equipment Leasing and Finance Association‘s Monthly Confidence Index, released Aug. 20, fell to 62.4 in August from 63.7 in July. Roughly 30 lenders were surveyed for the report. 

Equipment lenders such as Elevex Capital are bullish on the equipment industry but pessimistic about the economy, Chief Executive Jeffry Elliott stated in the report.

“Equipment doesn’t stop wearing out because the macro picture gets complicated. What changes is how it gets financed, and a rising-rate, high-inflation environment is where true leasing earns its keep,” he said. “My No. 1  concern is supply chain risk, and I don’t think our industry has priced it. Lessees whose equipment sits idle waiting on a part still owe the payment, and uptime is collateral performance. We’re deploying our pre-recession playbook now, not later.”

Of the surveyed lenders, 26.1% believe business conditions will improve over the next four months, up from 22.7% in July, and 26.1% expect demand to increase during that stretch, down from 28.6%. One-third of lenders expect expanded access to capital over the next four months, unchanged from July.

Check out our exclusive industry data here.