2021 Equipment Finance Trends for Small Businesses
Equipment Financing Sector
In the United States, vaccination rollouts have been promising for the future of the economy. This increase in vaccination rates provides hope for better days to come for economic activity. However, the COVID-19 pandemic continues to significantly impact many industries.
Equipment acquisition propels supply chains throughout the US manufacturing and service sectors.
- The Equipment Leasing and Finance Association is expecting US businesses, nonprofits, and government agencies to spend more than $1.8 trillion in capital goods or fixed business investment, financing the majority of those assets.
- About 8 in 10 businesses utilize equipment leasing and financing.
Small Business Outlook
Small business revenue is down, however, circumstances are improving. New relief measures being implemented and an increase in consumer demand should aid small businesses in the next term.
- PPP: The recapitalized PPP is directed toward small businesses more gravely affected. Even though the direct relief in the newest package is lower than previous efforts, the aid is geared toward industries in need. To illustrate, $29 billion for the restaurant industry.
- Consumer demand: An increase in consumer demand is seen due to more relaxed capacity limits, stimulus payments, and climbing vaccination rates.
Uncertainty of their Future
Many small businesses are still dealing with unpaid rent and past due bills that may put them out of business.
- A survey conducted by H&R Block discovered that 40 percent of small businesses are uneasy that they will not survive the pandemic.
- The Census Bureau’s Small Business Pulse Survey demonstrates that 20 percent of businesses will require financial help or more capital in the coming 6 months.
Even though some businesses are still struggling, smaller companies have experienced an employment rebound more quickly than large companies. According to ADP Payroll data, employment at firms with fewer than 50 employees is now 4.9 percent below February 2020 levels, whereas employment at companies with 1000+ is down 8.0 percent over the same period.
Overall, what seems to be the worst of the pandemic is over with. The rise in vaccination rates, an increase in consumer demand, and less restrictive pandemic operating rules provide hope for brighter days ahead.