US equipment finance new business grows 6.8% in 2025

New business volume in the US equipment finance industry increased by 6.8% in 2025, more than double the previous year’s growth rate of 3.1%, according to the Equipment Leasing & Finance Association (ELFA).

The findings, published in ELFA’s 2026 Survey of Equipment Finance Activity (SEFA), highlight the resilience of the $1.3 trillion industry despite continued economic uncertainty and pressure on profitability.

Based on data from nearly 100 equipment leasing and finance companies, the annual survey found that new business volume grew faster than the US inflation rate of 2.9% in 2025.

Overall, 62.4% of surveyed companies reported an increase in new business volume, compared with 50.5% in 2024.

“This comprehensive report provides industry stakeholders with the data and insights they need to benchmark performance, understand market dynamics, and navigate an increasingly competitive and evolving landscape.”

Banks and independents drive growth

Growth varied across different types of equipment finance providers, with banks reporting an 8.7% increase in new business volume and independent finance companies recording growth of 17%.

Captive finance providers experienced a marginal decline of 0.1%.

By transaction size, large-ticket financing recorded the strongest growth, increasing 19.9% year-on-year, while small-ticket and middle-ticket financing grew by 5.4% and 5.3% respectively.

Construction, agriculture, trucks and trailers, office machines and material handling were the five most-financed equipment categories during 2025.

The largest end-user sectors by new business volume were agriculture, construction, other services, wholesale and retail, and finance and insurance.

Portfolio quality remains stable despite profitability pressures

The survey found that credit quality remained relatively strong, with 98.5% of receivables classified as current, meaning less than 30 days overdue.

Gross charge-offs declined slightly to 68 basis points from 69 basis points in 2024, while net losses as a proportion of average receivables fell to 52 basis points from 54 basis points.

However, profitability remained under pressure. Income before tax as a proportion of total revenue declined to 20.8%, compared with 23% in 2024.

Interest expenses accounted for 40.4% of total revenues, broadly unchanged from the previous year but significantly above the 20% to 30% range recorded between 2016 and 2023.

Financing spreads improved by 40 basis points to 2.99%, supported by a reduction in the average cost of funds to 4.40%.

Return on average assets remained relatively low at 1.2%, while return on average equity increased to 12%, up from 7.9% in 2024.

AI adoption increases across equipment finance

The report also highlights the industry’s continued investment in technology and artificial intelligence.

Sales and credit underwriting recorded the highest rates of AI implementation, at 43% and 41% respectively.

Meanwhile, 65% of respondents are exploring AI applications for billing, with 60% considering its use in asset management.

Employment across the industry declined by 1% during 2025, although independent finance companies increased headcount by 8%.

Alongside the main survey, ELFA published its 2026 Small-Ticket SEFA, focusing specifically on smaller equipment finance transactions. This companion report recorded a 0.6% increase in new business volume during 2025.

The 2026 SEFA was administered by PricewaterhouseCoopers in collaboration with ELFA’s Research Committee and provides more than 2,000 data points covering industry performance.

The full report and interactive data dashboard are available through the ELFA website.