The latest CapEx Finance Index (CFI), released by the Equipment Leasing & Finance Association (ELFA), continues to show that the equipment finance industry is on pace for another record year. Demand cooled but remained elevated compared to this time last year. Industry financial conditions remained resilient even though inflation has picked up and the Fed has shown little interest in lowering rates this year. The easing of hostilities in the Middle East could further boost demand and improve financial conditions over H2/26.
- Total new business volume (NBV) among surveyed ELFA member companies was $10.2 billion on a seasonally adjusted basis.
- Year-to-date NBV rose by 11.5% relative to the same period in 2025.
- Year-over-year, NBV declined by 7.7% on a non-seasonally adjusted basis.
“Equipment demand cooled for a fourth consecutive month in May, but the overall level of new activity is still above its 2025 average pace,” Leigh Lytle, president and CEO of ELFA, said. “We’re still headed for the strongest year on record, and I expect demand to remain solid over the second half of the year. Delinquencies picked up, but continue to hover in a narrow band, and the average loss rate fell for a second consecutive month. Our data continue to point to healthy financial conditions in the industry, which will continue to serve as a buffer should we encounter additional surprises in 2026.”
Demand continued to ease, but remains healthy. Total NBV was $10.2 billion in May, a contraction of 2.3% from the previous month. The total new volume series tracks the amount of new activity added by banks, independents, and captives in a given month. While the total new volume series declined for a fourth consecutive month, May activity was still above its 2025 average of $10 billion a month. Equipment demand in the CFI is forecasted to reach $128 billion in 2026, the highest level recorded in any year since the survey began in 2006.
Small ticket volume growth tracks broader economic conditions and is an important barometer of aggregate demand for equipment. Small ticket deals grew by $3.5 billion, down 1.3% from March. Year-to-date, small ticket deal activity is up 29.9% from the same period in 2025.
Activity at banks rose by $5.0 billion, a slowdown from a very hot April, but still above its trailing six-month average of $4.9 billion a month. Activity at captives was down 3.7%, while new deals at independents grew by 2.1% in May.
Credit approvals rise. The industry-wide average jumped 1.9 percentage points to 79.0% in May. That is the highest average approval rate since December 2021. The average small ticket approval rate dropped by 0.7 percentage points to 80.4%. The small ticket approval rate is down around 0.5 percentage points since the start of the year. The rate at banks and independents jumped by 3.0 and 3.8 percentage points, respectively, while the rate at captives declined by 1.6 percentage points.
Delinquencies rise, but losses fall. The overall delinquency rate rose to 2.1% in May. It continues to oscillate in a narrow band between 1.8% to 2.1%. The rate at banks rose by 0.45 percentage points. On balance, the average delinquency rate at banks is down 0.07 percentage points so far in 2026. The rate at independents rose while the rate at captives declined.
The overall loss rate decreased by 0.05 percentage points to 0.49%, the second decline in as many months. The average loss rate for small ticket deals dropped by 0.13 percentage points to 0.71%. The rate at banks was essentially flat, while the rate at captives and independents both declined by 0.12 percentage points.
Industry Confidence: The Monthly Confidence Index tracks the sentiment of executives in the industry. The index in June is 63.7, an increase from the May index of 59.9, and the second consecutive increase since the start of the war in Iran.
“Underlying equipment demand remains resilient, though clients are taking a more measured, deliberate approach as higher interest rates and ongoing macro and geopolitical uncertainty weigh on decision making and extend deal timelines,” Linda Redding, managing director and head of equipment finance at J.P. Morgan, said. “Inflation expectations and policy-related factors, such as tariffs and regulatory changes, also continue to influence project economics in many sectors. Increasingly, our clients are seeking out industry experts and research to help guide timing and structure to ensure they are accounting for all possible variables prior to execution. Looking through year-end, we expect activity to remain steady, supported by replacement-driven purchases and selective growth investments that can generate clear returns.”
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.
