U.S. Equipment Financing Climbs Nearly 6% in December, ELFA Reports

U.S. businesses increased borrowing to fund equipment purchases by 5.9% year-on-year in December, with new deals totaling $10.6 billion on a seasonally adjusted basis. The Equipment Leasing and Finance Association said total activity reached the second-highest level on record, even as bank-originated activity declined modestly month-to-month. Industry sentiment also improved, with the affiliated Foundation’s confidence index rising to 64.6 in January.

Key Points

Equipment financing borrowing rose 5.9% year-over-year in December, reaching $10.6 billion in new deals on a seasonally adjusted basis.
Bank-originated equipment finance activity fell 1.2% from the prior month, even as overall sector activity reached the second-highest level on record.
Industry sentiment improved - the Equipment Leasing & Finance Foundation confidence index hit 64.6 in January, an 11-month high and above the 50 threshold for positive outlooks.

Overview

U.S. companies stepped up borrowing to finance equipment acquisitions in December, registering a 5.9% increase from the same month a year earlier, the Equipment Leasing and Finance Association said on Monday. On a seasonally adjusted basis, new loans, leases and lines of credit signed in December totaled $10.6 billion, marking an uptick from November.

Composition and channel trends

The ELFA noted that while aggregate equipment finance activity was robust, lending through banks eased slightly from the prior month - activity at banks was down 1.2% month-to-month. The CapEx Finance Index that ELFA publishes is drawn from a survey of 25 organizations involved in equipment financing. The survey roster includes large financial institutions and the financing arms of major equipment and technology manufacturers such as Bank of America, as well as the financing units of Caterpillar, Dell Technologies, Siemens AG, Canon and Volvo AB.

Industry view and outlook

Leigh Lytle, ELFA’s President and CEO, characterized the data as evidence that the equipment finance sector not only endured significant uncertainty but has in many respects prospered. She cautioned that some volatility is expected in 2026 but indicated that indicators point to continued strong demand and stable financial conditions, particularly against the backdrop of market expectations for additional rate cuts later in the year.

Sentiment indicators

The Equipment Leasing & Finance Foundation - ELFA’s non-profit affiliate - reported that its confidence index climbed to 64.6 in January, up from 58.3 in December. The foundation’s index uses 50 as the threshold between a negative and a positive business outlook, making the January reading an 11-month high and a clear signal of improved sentiment among surveyed participants.

Implications

The data indicate sustained demand for equipment financing across a range of providers despite some month-to-month shifts within distribution channels. At the same time, expectations of policy easing appear to be factored into the sector’s forward-looking optimism. The association’s measures offer a snapshot of activity in an equipment finance market valued at more than $1 trillion.

Risks

Near-term volatility is anticipated in 2026, which could affect demand and funding conditions for equipment finance - this impacts lenders and lessees across the equipment and capital goods sectors.
A decline in bank-originated activity month-to-month suggests potential channel shifts in funding sources, which could alter competitive dynamics for banks and specialty finance firms.
Expectations of rate cuts were cited as a factor in optimism; changes in monetary policy timing or magnitude could influence borrowing costs and demand in the equipment finance market.

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