US equipment finance industry reaches record $1.5 trillion

The US equipment finance industry reached a record $1.51 trillion in 2025, growing 8.7% year-on-year, as more businesses turned to financing to support investment in equipment and software, according to new research from the Equipment Leasing & Finance Association (ELFA).

ELFA’s Industry Horizon Report: A Market Sizing Study 2026-2027 found that 87% of businesses acquiring equipment or software used at least one form of financing, up from 82% in its previous survey.

The report estimates that 55.2% of the $2.7 trillion invested in equipment and software across the US economy in 2025 was financed, rising to 61.2% when considering private sector investment alone.

Overall equipment and software investment increased by 10% in nominal terms during 2025, while the equipment finance industry expanded by 8.7% compared with the previous year.

He added that the industry’s footprint is now 2.5 times larger than when ELFA conducted its first equipment finance end-user survey in 2007.

Financing demand driven by cashflow and technology investment

Optimising cashflow remained the primary reason businesses chose to finance equipment and software acquisitions, cited by 72% of respondents.

Tax advantages were identified by 55%, while 54% highlighted protection against equipment obsolescence.

Leasing accounted for 23% of total equipment and software acquisitions in 2025, followed by lines of credit at 14%, secured loans at 13% and unsecured loans at 8%.

The report also revealed significant differences in financing preferences across equipment categories.

Medical equipment was the most likely to be financed, with 82% of acquisitions funded through finance arrangements, followed by automobiles at 77%, agricultural equipment at 73% and construction equipment at 70%.

By comparison, just 47% of computer acquisitions were financed, reflecting the growing influence of large technology companies investing heavily in AI infrastructure using internal funds.

ELFA noted that this shift towards computer investment contributed to a modest decline in the overall proportion of equipment investment financed, despite more businesses using finance products.

Businesses expect investment to increase in 2027

Looking ahead, 35% of businesses expect their equipment and software acquisitions to increase in 2027, compared with 17% anticipating a decline.

Software, computers, office equipment and communications technology were among the most frequently identified areas for increased investment.

Technology advancements and equipment obsolescence were cited by 37% of respondents as factors influencing future financing decisions, while general economic conditions and interest rates were each identified by 34%.

Inflation remained another consideration, cited by 31% of businesses.

AI adoption accelerates across US businesses

The research also highlighted the rapid adoption of generative artificial intelligence.

Almost three-quarters (74%) of respondents said their businesses currently use generative AI, compared with 42% in 2024, while a further 19% intend to adopt the technology within the next two years.

The most common applications included data analysis, cited by 54%, workflow automation at 44% and content generation at 43%.

However, only 20% identified fraud detection and prevention as a reason for using generative AI.

Growing demand for digital finance platforms

The report found strong interest in digital equipment finance services, with 82% of respondents saying they would use a free, fully digital platform to manage equipment acquisitions if one were available.

Real-time application tracking was identified as the most valuable digital feature by 44% of businesses, followed by online document upload and verification and electronic signatures, both at 43%.

Despite this demand, only 5% of respondents said they currently interact with their equipment finance provider primarily through a mobile app.

The findings highlight opportunities for lenders and technology providers to improve the customer experience through greater automation and digital integration.

Cress said: “Despite a shift in investment toward AI-related technology, much of which is funded by large firms with ample internal cash flow rather than reliance on financing, the share of end-users using at least one form of financing rose.”

The report, prepared by Keybridge and based on ELFA’s summer 2026 survey of equipment end-users, provides an assessment of the industry’s size, financing trends and expectations for future investment.

The full Industry Horizon Report: A Market Sizing Study 2026-2027 is available from ELFA.