US equipment demand in 2025 hits second-highest level on record

Equipment demand in the United States reached its second-highest level ever in 2025, according to the latest CapEx Finance Index (CFI) released by the Equipment Leasing & Finance Association (ELFA).

Falling just short of 2024’s record-breaking performance, the results highlight the resilience of the equipment finance industry amid a year marked by volatility and economic uncertainty.

Despite shifting market conditions, financial fundamentals across the sector remained strong, supporting a positive outlook for 2026. ELFA noted that expectations for potential interest rate cuts later this year are reinforcing confidence, pointing toward another year of healthy balance sheets and sustained equipment demand.

Among ELFA member companies surveyed, total new business volume (NBV) reached $10.6 billion on a seasonally adjusted basis in December, an increase from the prior month. Year-over-year, NBV rose 5.9% on a non-seasonally adjusted basis, although year-to-date NBV for 2025 was down a marginal 0.5% compared with the same period in 2024.

“December confirmed that 2025 was a year for the record books, with new business volumes closing the year on a tear,” said Leigh Lytle, President and CEO of ELFA.

“The data show that the equipment finance industry has not only weathered but thrived amid historic uncertainty. While we expect some volatility in 2026, all signs point to another year of strong demand and stable financial conditions.”

Total new activity in 2025 reached $119.8 billion, just 0.5% below its all-time high in 2024. December NBV grew by $10.6 billion, a 3.1% increase from November, marking the industry’s longest stretch of monthly activity above $10 billion since early 2023. Growth in the second half of 2025 was also notable, with cumulative business volume rising 1.6% compared with the same period in 2024.

Small ticket volume – an important barometer of overall equipment demand – rose sharply in December, increasing by $4.6 billion, or 30%, from the previous month. Performance across provider types was mixed: activity at banks declined 1.2% month over month, while volumes grew 16.7% at captives and surged 29.2% at independents, with gains broadly distributed among respondents.

Credit conditions remained robust. The overall credit approval rate edged down slightly to 78.1% in December but stayed near a decade high. Small ticket approval rates dipped to 81.0%, still well above the 2024 average of 75.4%. Approval rates at banks increased modestly to 80.6%, while rates at captives and independents declined to 79.9% and 71.8%, respectively.

Delinquencies were largely unchanged, holding at 2.0% industry-wide and remaining within the trailing two-year range of 1.9% to 2.2%. Loss rates, however, rose modestly, with the overall rate increasing to 0.57% in December. Losses were stable at banks, ticked up slightly at captives, and rose more sharply among independents.

Commenting on market conditions, Anthony Perettine, President of Peapack Capital and an ELFA member, said the firm closed a record year in 2025 and is positioned for significant growth ahead.

“Underlying credit quality in our diversified customer base is at an all-time high,” he noted, adding that portfolio performance has strengthened considerably following disruptions during the Covid years.

Industry sentiment also improved markedly. ELFA’s Monthly Confidence Index for the Equipment Finance Industry (MCI) rose to an 11-month high of 64.6 in January, up from 58.3 in December, reinforcing optimism that strong demand and solid financial conditions will carry into 2026.