US equipment finance new business volumes rise 18.6% in Q1

The Equipment Leasing & Finance Association (ELFA) reported record-breaking demand for new equipment in the first quarter of 2026, even as global geopolitical tensions and economic uncertainty continue to mount.

According to ELFA’s latest CapEx Finance Index (CFI), total new business volumes (NBV) reached their highest quarterly level on record, signalling strong momentum across the equipment finance sector. While growth moderated slightly in March, the broader trend points to sustained expansion.

Total NBV among surveyed ELFA member companies came in at $10.8 billion in March on a seasonally adjusted basis. That figure represents a modest 1.8% decline from February’s $11.0 billion, but year-to-date volumes are up 18.6% compared to the same period in 2025. On a year-over-year basis, NBV rose 12.5% without seasonal adjustments.

“New business volume growth slowed modestly in March, but the industry just experienced its strongest quarter ever.”

Lytle cautioned, however, that the full economic effects of ongoing conflict in the Middle East, particularly rising energy prices, may not yet be reflected in the data. “I wouldn’t be surprised to see some deterioration in demand heading into the summer,” she added, while emphasizing that overall financial conditions remain healthy.

Despite the slight monthly dip, equipment demand remains robust across key segments. Activity among banks and independent finance firms rose 2.3% in March, while volumes at captives declined just 0.2%.

Small-ticket financing, a key indicator of broader economic activity, totalled $3.4 billion in March, down 17.7% from February. Even so, the segment remains near historic highs, with recent months marking the strongest small-deal volumes on record.

Independent lenders saw a sharp 34.3% monthly drop in new deals, though volumes were nearly flat year over year, declining just 0.3%.

Credit conditions held steady overall. The industry-wide credit approval rate edged up to 77.2% in March, continuing a year-long upward trend. Small-ticket approvals also improved, reaching 79.8%.

However, signs of strain are emerging. The overall delinquency rate rose to 2.0%, in line with its two-year average, while the loss rate increased to 0.62%. Loss rates for small-ticket deals climbed to 0.93%, driven largely by a single respondent.

Across lender types, delinquency rates rose at banks but declined at captives, while independents saw minimal change.

Industry sentiment weakened in April, with ELFA’s Monthly Confidence Index falling to 54.6 from 61.0 in March, its lowest level since May 2025.

“Tariffs may have stalled decision-making in 2025, but 2026 is all about execution,” Paradisi said. “We are seeing strong activity across construction, healthcare, and manufacturing, where businesses are moving forward with expansion projects and equipment upgrades.”

He added that geopolitical uncertainty, including tensions involving Iran, is continuing to strain supply chains and increase input costs, making access to flexible working capital more critical than ever.

“As borrowing costs remain elevated, businesses are prioritizing speed and access to capital over cost alone,” Paradisi said. “Working capital has become the bridge that keeps large-scale projects moving forward on schedule.”

While risks tied to geopolitics, inflation, and potential leadership changes at the Federal Reserve remain in focus, ELFA’s latest data suggests the equipment finance industry entered 2026 with strong underlying momentum.

With record-breaking quarterly volumes and resilient demand, the sector appears well-positioned, at least for now, to navigate an increasingly complex economic landscape.