ELFA CapEx Finance Index Shows New Business Volumes Surged at Year-End



The Equipment Leasing and Finance Association (ELFA) released its CapEx Finance Index, finding that growth in new business volumes suggests durable goods orders will expand by 0.35% in December.

Additionally, according to the report, total new business volume (NBV) rose by $11.4 billion, a jump of 8.1% from November to December among surveyed ELFA member companies. NBV expanded by 4.2% from 2023 to 2024. Charge-offs (losses) dropped to 0.52%, after rising in the prior month.

“Just as we predicted last month, the equipment finance industry ended 2024 on a high note,” Leigh Lytle, president and CEO of ELFA, said. “A surge in bank financing pushed new business volume to a new high, reflecting more certainty following the election and an acknowledgment that interest rates may not fall much further in 2025. I expect that momentum to continue even if activity slows a little in the months ahead; December is usually a strong month for new business activity with the end-of-quarter, end-of-year spike. The mixture of federal policies will be a big factor in 2025, and deregulation could help demand for construction and mining equipment. However, the industry is well-positioned to face a potentially turbulent 2025.”

Bank financing drove the jump in new activity. Most of the 8.1% monthly rise in NBV came from the banking industry, which surged by 36.2% from November to December. That jump outweighed the modest 0.2% rise in new business growth for captives and the 5.3% contraction in financing activity at independents. The jump in bank lending is the largest on record and pushed the share of bank business activity to nearly 62% of total new business volume, its highest share since before the Global Financial Crisis in the mid-2000s.

Employment contracted further. Employment in the equipment finance industry contracted again in December, with the 12-month change from December 2023 dropping by nearly 2.0%. Employment at banks and captives declined year over year by 1.2% and 7.1%, respectively. Those declines were partially offset by the 2.5% increase in headcount at independents.

The credit approval rate ticked up but remained near its 2024 low. The average credit approval rate increased to 74.3% of all credit decisions in December, after a precipitous decline from August to November. While the overall increase was modest, approval of small ticket financing saw its biggest one-month increase since March, rising by 3.6 percentage points.

Financial conditions remain healthy. Charge-offs dropped to 0.52% as a percentage of net receivables, a welcome decline after the November jump of 0.26 percentage points. Aging receivables over 30 days also rose slightly to 2.0%, but continue to hover near two-year lows.

“Equipment finance activity continues to be supported by a resilient U.S. economy, which ended 2024 on strong footing,” Tina Eickhoff, CLFP, senior vice president, head of equipment finance at U.S. Bank, said. “Despite a solid year in our industry, we think there is still a lot of pent-up demand for equipment purchases in 2025. With the election behind us and a little more clarity around interest rate cuts and the economic outlook, we expect more firms to be focused on growth projects with new equipment.”

The Monthly Confidence Index from ELFA’s affiliate, the Equipment Leasing & Finance Foundation, rose for the third consecutive month in January, signaling that industry executives remain optimistic about 2025 despite the high uncertainty surrounding federal immigration and trade policies.


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