The latest CapEx Finance Index (CFI), released by the Equipment Leasing & Finance Association (ELFA), showed that demand cooled in August after an extraordinary July but remained historically strong. Even after the decline, August was the second strongest month in the survey’s history, and the full-year forecast edged up to a new high. Financial conditions also improved, with the average loss rate falling to its lowest level in ten months. Fed rate hikes and elevated energy prices remain risks, but they are likely to have a minimal effect on equipment demand in 2026.
Total new business volume (NBV) among surveyed ELFA member companies was $11.8 billion on a seasonally adjusted basis. Year-to-date NBV rose by 17.3% relative to the same period in 2025. Year-over-year, NBV rose by 19.1% on a non-seasonally adjusted basis.
“Cooler demand in August was unsurprising given the strength of demand in July,” James Cress, acting president and CEO of ELFA, said. “July’s volume was nearly 25% above the previous all-time monthly high due to a surge in AI spending. August was still the second strongest month ever, further validating our forecast that 2026 will be, by far, the best year ever for new deal volumes. Credit quality improved as well, with the average loss rate falling to its lowest level in ten months and delinquencies holding near the low end of their two-year range. Higher borrowing costs from additional Fed hikes would put modest upward pressure on delinquencies and losses, but with credit quality this healthy, the industry would face some chop rather than a full-blown storm.”
Demand cooled from a record high but remained strong. Total NBV was $11.8 billion in August, a decrease of 17.3% from July’s all-time high of $14.3 billion. The total new volume series tracks the amount of new activity added by banks, independents, and captives in a given month. August was the second-highest month on record, 3.1% above the previous all-time high set in January 2026. Equipment deal volume is forecasted to reach $137.7 billion in 2026, the highest level recorded in any year since the survey began in 2006 and 14.4% above the previous record set in 2024.
Small ticket volume growth tracks broader economic conditions and is an important barometer of aggregate demand for equipment. Small ticket deals totaled $4.2 billion, down 34.5% from July’s record high. Even so, August was tied for the fifth-highest month on record and 10.9% above the average monthly pace over the 12 months ending in June, before the July spike. Year to date, small ticket deal activity is up 25.9% from the same period in 2025.
Activity at banks reached an all-time high of $6.0 billion, up 9.7% from July and surpassing the previous record set in March 2022. Activity at captives fell 37.2% to $3.6 billion, but that decline reflects the unwinding of July’s surge. Captive volume was still above its average monthly pace over the 12 months ending in June. Activity at independents was $2.2 billion, down 1.2% from July and slightly below its average over the same 12-month period.
Credit approval rate declined for a second month. The industry-wide average fell 2.0 percentage points to 75.4% in August, its lowest level since February 2025. The average small ticket approval rate fell 1.5 percentage points to 78.2%. The rates at captives and independents fell by 3.8 and 4.8 percentage points, respectively, while the rate at banks rose by 0.5 percentage points.
Delinquencies held steady, and losses fell. The overall delinquency rate held steady at 1.8% in August, near the low end of its two-year range and down 0.4 percentage points from a year earlier. The rate at banks fell by 0.09 percentage points, and the rate at captives fell to 1.9%, its lowest level since April 2019. The rate at independents edged up.
The overall loss rate decreased by 0.02 percentage points to 0.44%, its lowest level in ten months. The average loss rate for small ticket deals fell by 0.08 percentage points to 0.65%. The rate at banks fell to 0.28%, its lowest level since January 2023, and the rate at captives fell by 0.10 percentage points. The rate at independents ticked higher.
The Monthly Confidence Index tracks the sentiment of executives in the industry. The index in September was 62.4, unchanged from the previous month.
“Over the past quarter, many of our partners and customers have been impacted by various means of uncertainty, geopolitical developments and continued pressure to manage costs in a changing economic environment,” Mike Janse, general manager – U.S. at DLL, said. “Amid these headwinds, businesses recognize the need to modernize equipment and invest in technology that drives productivity and resilience. Looking ahead, interest rate trends, regulatory developments and overall business confidence will play an important role in asset finance demand, but we expect our partners and customers to remain focused on strategic investments that support long-term performance.”
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.
