New equipment demand hits all-time high as 2026 starts at record pace

Demand for new equipment finance in the US surged to a record high in January, according to the latest CapEx Finance Index (CFI) released by the Equipment Leasing & Finance Association (ELFA), signalling a strong start to 2026 for the sector.

New business volumes (NBV) among surveyed ELFA member companies reached $11.6 billion on a seasonally adjusted basis, the highest monthly dollar amount in the index’s 20-year history. On a non-seasonally adjusted basis, volumes were up 30.1% year-on-year, driven largely by financing activity at manufacturers. ELFA said financial conditions also improved during the month, suggesting industry momentum has remained resilient despite uncertainty over the path of US interest rates.

Leigh Lytle, President and CEO of ELFA, said: “Just as we expected, the equipment finance industry had a strong start to 2026. New activity surged to its highest monthly dollar amount ever, with much of the gain coming from equipment producers.

“The loss rate retreated after rising at the end of last year, and the average delinquency rate remained stable. It’s still early, but I’m optimistic that continued AI investment will translate into another year of strong growth in new financing activity, even if the Fed decides to put rate cuts on ice for the foreseeable future.”

January also marked the largest one-month increase in dollar terms in the two-decade history of the index, with total NBV rising by 7.8% from December. The spike pushed the 12-month change to 30%, the strongest annual increase since February 2018. Small ticket volumes, often seen as a barometer of broader economic conditions, increased by $5.3 billion, up 5.5% month-on-month.

Activity varied across provider types. New volumes at captives rose by 14.9%, while banks saw an 11.7% decline and independents recorded a 2.5% fall compared with December. Despite the monthly dip, volumes at independents remained just below the all-time high set in December 2025. ELFA said post-pandemic growth continues to be led by captives and independents.

Credit conditions showed mixed signals. Approval rates fell for a second consecutive month, with the industry-wide average declining to 76.8% in January. Delinquencies edged up to 2.1%, remaining within the mid-range of the past two years, while the overall loss rate dropped to 0.46%, reversing the increase seen at the end of 2025. Loss rates fell most sharply among independent finance companies.

The strong start to the year was mirrored by rising industry sentiment. ELFA’s Monthly Confidence Index climbed to 67.6 in February, the highest level since January 2025, reflecting improving expectations for demand, hiring and business conditions across the equipment finance market.