The CapEx Finance Index (CFI) by the Equipment Leasing & Finance Association (ELFA) showed that demand for equipment continued to improve in August, with new business volumes (NBV) rising for a second straight month despite both turbulent trade policy and changes at the Federal Reserve. The Fed’s decision last week to lower its key interest rate by 0.25 percentage points is expected to build on this momentum. The data provides valuable insight into the industry’s activity following the recent shift in monetary policy.
Key insights:
- FORECAST: The change in NBV suggests a 2.6% increase in new durable goods orders in August.
- Total NBV among surveyed ELFA member companies was $10 billion on a seasonally adjusted basis, an increase of 2.8% from July.
- NBV year-to-date contracted by 2.7% relative to the same period in 2024.
- Year over year, NBV declined by 2.0% on a non-seasonally adjusted basis.
“The equipment finance sector is holding up well despite some choppiness, and we’re seeing a second consecutive month of improving demand,” Leigh Lytle, president and CEO of ELFA, said. “I am not concerned about the modest rise in losses; we have seen similar spikes followed by quick reversals. With lower interest rates now a reality, we should see an easier financial environment, which should help fuel growth in equipment and software demand over the next 12 to 18 months.”
Equipment demand picked up again. Total NBV grew by $10.0 billion in August, in line with their trailing six-month average pace of $9.9 billion. New small ticket deal activity declined by 3.8% from July to August, falling to $3.2 billion. New volumes at banks rose by their fastest pace since March, growing by 5.6%. Activity at both captives and independents declined modestly by 3.6% and 4.8%, respectively. Volumes at captives are down 20% year-to-date from the same period in 2024; however, the decline is due to a particularly strong 2024 as well as a sharp drop in new activity at captives at the start of 2025. Activity at captives has improved in recent months, with the three-month average of new volumes holding steady at $2.8 billion in August, one of its highest levels of 2025. Year-to-date volumes at banks were up around 7% and down 3.6% at independents relative to the same period in 2024. Total new business volumes are expected to be around $113 billion in 2025, a decline from 2023 and 2024, the two strongest years in the survey, but in line with total activity in 2022.
Credit approval rose to a new two-year high. The average credit approval rate rose to 78.7% in August, the highest rate since December 2021. The average approval rate for small ticket deals rose by 1.7 percentage points. The rate at banks and independents contracted by 0.3 and 0.1 percentage points, respectively, while the average approval rate at captives increased by 2.6 percentage points.
The average loss and delinquency rates both rose. The overall delinquency rate edged up for the second consecutive month to 2.1% in August, still only its third-highest reading of the year. The delinquency rate on small ticket deals rose by 0.1 percentage points to 2.3% but remained near its 2025 low. Rates rose modestly at all three major institution types.
The overall loss rate rose by 0.10 percentage points to 0.60% in August. The average loss rate for small ticket deals dropped slightly to 0.61%. The loss rate at banks rose 0.17 percentage points to 0.57%, after falling by 0.13 points in the previous month. The average loss rate increased at independents but edged down at captives.
“Despite a dynamic economic landscape, the equipment finance sector continues to show resilience and adaptability,” Martin Golobic, CEO of GreatAmerica Financial Services, said. “August’s uptick in new business volume and the highest credit approval rate in two years signal strong underlying demand and confidence. As we look ahead, I’m encouraged by the steady momentum and the industry’s readiness to support businesses in acquiring the tools they need to grow. At GreatAmerica, we remain committed to helping our partners navigate change and seize opportunity, while making significant investments in new capabilities to enhance every aspect of the financing experience.”
The Monthly Confidence Index from ELFA’s affiliate, the Equipment Leasing & Finance Foundation tracks, remains at a heightened level for the fourth consecutive month, relatively unchanged at 59.9 in September from 60.2 in August.
Technical Note: New business volume data are concurrently seasonally adjusted each month to capture the latest seasonal patterns. Data in previous months and years may change due to updated seasonal factors.
