Accord’s Observations on Economic Trends and Capital Investment
With consumer spending patterns shifting from services to goods, U.S. manufacturing has benefited from onshoring during the pandemic. Clogged international logistics channels from foreign goods manufacturers combined with national support for job creation have turned business confidence from cautious to optimistic when considering capital investment. Residential construction, logistics/transportation, personal hygiene/cleaning products are just a few categories that have experienced strong growth during the past twelve months. Add to this increasing daily vaccination rates across the country pointing to more normalized activities across major drivers of the economy that have been curtailed by Covid: air travel, hospitality, live entertainment and restaurants to name a few.
Equipment Finance Industry Highlights
Below are some salient data points reported recently by the Equipment Leasing and Finance Association (“ELFA”):
- ELFA’s February Monthly Confidence Index (“MCI”) shows an upswing in credit applications, financing requests and businesses using leasing to lock in low interest rates/monthly payments. The MCI is polled monthly from executives that manage $900 billion of equipment finance.
- Changes in consumer demand and altered work environments will continue to fuel demand for logistics and technology investments beyond the curtailment of the pandemic.
- Bank C&I loans (non-PPP) trended down throughout 2020, delinquency and default rates are moving up as banks continue to tighten lending standards.
- Remote working softened transactions volume early in the pandemic and forced greater adoption of technology aided due diligence, digital documentation, and e-signature acceptance.
Accord Financial’s Response
Accord Financial maintains a strong balance sheet enabling us to lend predictably and efficiently to our clients. As a non-bank lender, Accord offers flexible equipment finance solutions that may not be readily available from a bank. Companies starting with $10M revenue/$2M EBITDA fit our smaller company profile, while those at $50M revenue/$5M EBITDA fit into our middle market profile, with each segment fitted with tailored credit decisioning, products and closing processes. We have been focused on helping business get access to capital with certainty of close.