One of the best indicators of a growing economy is the demand for capital equipment lending. When it’s high, companies are scooping up new equipment, which means their businesses are growing, which means the economy is growing. I’m not very good at math, but that seems like a simple enough formula.
November brought us a nice indicator, then.
Financing Way Up
Our link comes to us courtesy of EquipmentEngine Lender Solutions, who in turn turned to NASDAQ for the good news. In total, business equipment financing volume grew by a lot:
Financing volume for business equipment rose 38% in November from a year earlier, according to a new survey, as capital spending in the U.S. demonstrates the breakout growth that has mostly been missing since the end of the recession in 2009.
Respondents to the Equipment Leasing and Finance Association’s monthly survey said they financed $6.2 billion of new equipment in the U.S. last month, compared with $4.5 billion in the year-earlier period. November’s volume was 3% higher than October’s. December’s volume will likely be higher than November, as companies rush to complete budgeted purchases of equipment before the end of the year.
From January through November, survey respondents provided financing for $63.2 billion of equipment purchases, up 25.7% from the same period in 2010. The recovery in the $628 billion-a-year commercial leasing and financing industry from its 2009 doldrums continues to regain momentum after activity plunged in July and August.
Given the reliability of this particular metric, it’s fair to say we’re in a full-blown economic recovery. Those words sound as sweet as honey right about now. When you realize that many other segments are showing growth, it’s fair to wonder if 2012 is the year we finally get out of the financial morass that has plagued the U.S. since late 2007. You know, before the world ends.
I’m sure your next question is whether Direct Capital has seen this same thing, given that we offer equipment financing. The short answer is yes, while the long answer is yesssss. It’s been a banner year for equipment financing all the way around, and the demand should lead lenders to craft great deals in 2012.
So to recap, equipment financing is up 38% in November, 25% year-over-year from 2010 and small business confidence is trending upward with them. Unlike my beloved Atlanta Falcons, the economy has a lot of momentum heading into the new year.
Are you going to be looking for equipment financing in 2012? Share your story with us.