US equipment finance demand eases but remains on course for record year

New business volume growth in the US equipment finance sector slowed slightly in April, although activity remains on track for a record year, according to the latest CapEx Finance Index (CFI) published by the Equipment Leasing and Finance Association.

Total new business volume (NBV) among surveyed ELFA member companies reached $10.6 billion on a seasonally adjusted basis in April, down 1.1% from the previous month. It was the third consecutive monthly decline, suggesting some moderation in demand after a strong start to the year.

Despite the slowdown, year-to-date new business volume is running 15.0% ahead of the same period in 2025, while non-seasonally adjusted volume was up 9.6% year-on-year.

According to ELFA, equipment demand remains stronger than the average monthly pace recorded during the second half of last year and is still on course for its strongest annual performance on record.

“New business volume growth slowed a tad, but demand is still above what we saw for most of last year. The surge in demand from AI-related deals appears to be outweighing geopolitical tensions at the moment, but I’ll be keeping a close eye on the May report for signs of further easing.”

Small-ticket finance activity continued to perform particularly strongly. New small-ticket business rose to $3.6 billion in April, up 8.7% from March, and is now running 39.8% ahead of the same period last year.

Activity among banks reached $5.4 billion during the month, one of the highest monthly totals recorded by the index. Captive and independent finance providers also reported growth, with activity increasing by 5.3% and 5.9% respectively.

Credit quality indicators remained stable. The industry-wide approval rate edged down marginally to 77.1%, while the average approval rate for small-ticket transactions increased by 1.3 percentage points to 81.1%.

Portfolio performance also improved during the month. The overall delinquency rate fell to 1.8%, matching its lowest level over the past two years, while the industry loss rate declined to 0.54%. Small-ticket losses also improved, falling to 0.84%.

The report suggests that finance providers continue to benefit from healthy balance sheets despite ongoing uncertainty surrounding interest rates and geopolitical developments.

Industry sentiment also strengthened. ELFA’s Monthly Confidence Index rose to 59.9 in May from 54.6 in April, indicating growing optimism among sector executives.

Dominic Janney, President of Canon Financial Services, said businesses were becoming more selective about capital investment decisions amid economic uncertainty but still recognised the importance of equipment upgrades.

“This past quarter, we’ve seen a clear shift: global economic changes and changing expectations mean businesses and municipalities are being incredibly deliberate with their capital,” he said.

“They’re cautious, and rightly so. But postponing critical equipment upgrades poses a massive risk to staying competitive. As financing partners, we must deepen client relationships, stay agile on pricing and build customised, flexible solutions that help organisations continue investing in their future.”

The latest data suggests that while equipment finance demand may be moderating from the exceptionally strong levels seen earlier in the year, underlying market conditions remain supportive, with strong approval rates, improving portfolio performance and growing confidence across the industry.