Economic Outlook – Strategies for a Strong Second Half

Secured Research surveyed over 1400 Middle Market CFOs, 5000 Small Business Decision Makers, and 2600 Equipment Sellers on over 800 topic areas for the first six months of 2024. Here are key data points to help drive strategy for a strong year-end close:

  • 58% of Middle Market CFOs and 27% of Small Business decision-makers plan to proceed with previously delayed capital expenditures due to improved economic conditions and lower interest rates.
  • There is a reported “moderate to severe” contraction in credit terms from primary banks, providing opportunities for well-capitalized lenders to gain market share. This means that credit terms have become more restrictive, making it more difficult for businesses to obtain loans or financing.
  • While over 60% of all audiences express concerns about the upcoming election’s impact on growth investment plans, historically, the impact of elections on capital expenditures has been limited.
  • The shift towards subscription-based or as-a-service-based capital expenditure consumption is evident, with a 21% increase in the middle market and a 13% increase in small businesses.
  • Infrastructure spending is gaining momentum, with construction firms reporting higher backlogs and $1.2 trillion in government funding being utilized.
  • Despite revenue pressures, a significant percentage of manufacturers plan to increase automation investment to address labor issues.
  • New electric vehicle and battery factory construction is on the rise, with significant capex spending expected to continue through at least 2026.
  • Equipment sellers are increasingly open to new finance partnerships and seeking alternatives, reflecting a notable shift from previous years.

Our Analysis – In today’s challenging economic climate, businesses may find it difficult to secure financing through traditional banking channels. At times like these, it’s essential to consider alternative solutions, such as leasing arrangements offered by First Financial. As a robust and independent equipment leasing provider, First Financial stands ready to extend credit when other avenues may be closed off.

By opting for leasing solutions, businesses can confidently proceed with capital expenditures that may have been put on hold due to financial constraints. This approach not only ensures the acquisition of necessary equipment but also brings stability to resource allocation and cost planning. Moreover, equipment financing through leasing minimizes upfront costs, bolsters cash flow, and potentially increases purchasing power. This, in turn, enables access to high-quality equipment and supports equipment customization, while also simplifying the process of replacing outdated equipment and averting maintenance costs and production inefficiencies.