US equipment finance 2026 forecast hits record $129bn

Demand for equipment finance in the US rebounded in June, with new business volumes returning to growth and the industry remaining on course for a record year despite renewed geopolitical uncertainty and the prospect of higher interest rates.

The latest CapEx Finance Index (CFI) from the Equipment Leasing & Finance Association (ELFA) showed total new business volume (NBV) reached $10.5 billion on a seasonally adjusted basis in June, up 2.5% from the previous month following four consecutive monthly declines.

The recovery reinforces what ELFA described as a normalisation in activity rather than a deterioration in market fundamentals. New business volume for the first half of 2026 is up 11.3% compared with the same period last year, while June volumes increased 17.2% year-on-year on a non-seasonally adjusted basis.

Based on current trends, ELFA now expects total equipment finance deal volume to reach a record $129 billion in 2026 – the highest annual total since the survey began in 2006.

“2025 started off with a bang, and some cooling was always expected. Even with some easing from peak levels, business activity over the first half of 2026 is up over 11% from the same period last year.

“Financial conditions remain healthy. The industry-wide delinquency rate dropped to a multi-year low, and losses remain modest. As has been the case for over a year, the industry remains well-positioned to meet the resurgence of tariffs, hostilities in the Middle East, and potential Fed rate increases later this year.”

The report showed broad-based activity across lender types, with banks generating $4.6 billion of new business during June, while captive finance providers accounted for $2.9 billion and independent finance companies $2.1 billion.

Although small-ticket business eased by 3.9% month-on-month to $3.3 billion, activity remains significantly stronger than a year ago, with year-to-date volumes up 25.8%, highlighting continued investment by smaller businesses.

Credit quality also remained robust during the month. The industry-wide credit approval rate increased by 0.6 percentage points to 79.5%, approaching a record high, while the small-ticket approval rate rose to 80.7%. Banks recorded the largest improvement in approval rates, with captive lenders declining slightly and independents remaining unchanged.

Portfolio performance strengthened further as the overall delinquency rate fell to 1.7%, dropping below the narrow range in which it has remained for the past two years. Banks saw the largest improvement following a rise in delinquencies during the previous month, while both captive and independent lenders also reported lower delinquency rates.

Losses remained modest despite edging higher, with the overall industry loss rate increasing marginally to 0.54%. Small-ticket losses were broadly unchanged at 0.72%, while independent finance companies experienced a slight increase.

Industry confidence also remained resilient. ELFA’s Monthly Confidence Index held steady at 63.7 in July, unchanged from June, suggesting executives remain optimistic despite an increasingly uncertain economic backdrop.

Kyin Lok, CEO of Dext Capital, said: “Customers largely looked past Middle East tensions, tariffs and energy spikes last quarter, while record high consumer debt and the prospect of gradually higher interest rates remained the biggest external pressures.

“Even so, customer health remains steady, portfolio performance remains solid, and the booming stock market reflects continued economic confidence and resilience in a new reality where change is the only constant. Over the next three to six months, we expect healthy equipment finance demand, led by accelerating AI data center investment and a gradual rebound in specialty transportation.”