ELFA CapEx Finance Index May 2025: Demand Rose, Financial Conditions Remained Healthy
How did your country report this? Share your view in the comments.
Diverging Reports Breakdown
February 2025: New Business Volumes Rebound
New business volumes rebounded on a seasonally adjusted basis, posting a similar level of new business activity as the previous two February reports. Activity grew at banks and captives, with new business volumes expanding month-over-month by 0.9% and 15.0% respectively. Financing at independents dropped by 6.4% after growing by 8.6% in the previous month. The pace of job losses slowed after picking up speed for three months, the pace ofJob losses slowed in February. The Monthly Confidence Index from ELFA’s affiliate, the Equipment Leasing & Finance Foundation, dropped to 58.1 in March, as respondents grew slightly more pessimistic about conditions over the next four months. The CapEx Finance Index is the only near-time index that reflects the volume of commercial equipment financed in the U.S. It is released monthly from Washington, D.C., one day before the Department of Commerce’s durable goods report. It consists of two years of business data from a survey of industry leaders.
Total new business volume (NBV) rose by $9.7 billion seasonally adjusted among surveyed ELFA member companies, an increase of 3.7% from the prior month.
NBV year-to-date contracted by 3.7% relative to the same period in 2024.
The year-over-year change declined by 7.4% on a non-seasonally adjusted basis.
Charge-offs (losses) rose to 0.55%, near the two-year high seen last November.
WASHINGTON, March 25, 2025 (GLOBE NEWSWIRE) — “The latest CFI release showed a return to normalcy in February. Demand for equipment returned to healthy levels after whipsawing the last few months due to a historic swing in financing activity at banks,” said Leigh Lytle, President and CEO at ELFA. “Financial conditions weakened a little as losses rose, but accounts past 30 days remained low, and new applications remained strong. 2025 is shaping up to be bumpy, but so far, the data indicates that demand for investment equipment has weathered the storm. We’re closely watching financial conditions for signs of erosion, but we expect the industry to have a solid year as long as the economy avoids a recession.”
New business volumes rebounded. Volumes increased on a seasonally adjusted basis, posting a similar level of new business activity as the previous two February reports. Activity grew at banks and captives, with new business volumes expanding month-over-month by 0.9% and 15.0%, respectively. Financing at independents dropped by 6.4% after growing by 8.6% in the previous month. Despite the cooling, financing activity at independents has gained ground over the last five years. From 2017 to 2019, independents comprised roughly 16% of all new business activity. That number jumped to 20% of all activity from January 2024 through February 2025. The share of activity at captives also increased by around 2.25 percentage points, while bank activity fell by almost 7.5 percentage points.
The pace of job losses slowed. After picking up speed for three months, the pace of job losses slowed in February. The sector was still down 2.4% over the last 12 months, mainly driven by a 6.4% contraction in employment at captives. Banks also experienced a 1.6% loss in headcount over the last year, while independents saw employment rise by 1.0%.
Credit approvals continue to hover around 75%. The average credit approval rate dropped to 75.4%, a decline of roughly half a percentage point. However, the rate remains well above the levels seen at the end of 2024.
Financial conditions somewhat weakened. Aging receivables over 30 days dropped back down to 2.0%, a decline of 0.2 percentage points. However, charge-offs (losses) rose to 0.55%, the second-highest level in the last two years. The increase in losses was driven by a rise in charge-offs at independents and banks. While the average loss rate rose, the loss rate for small ticket activity dropped after a notable jump in the prior month.
“KeyBank remains optimistic as credit quality continues well within historical norms, capital is abundant and the desire for earning assets is strong,” said Peter Bullen, Executive Vice President & Group Head, Key Equipment Finance. “We are also encouraged to see a significant rebound from Key Equipment Finance clients in equipment financing demand compared to last year at this time. At the same time, we remain vigilant of the potential impact of new tariffs and general economic uncertainty on capital spending.”
Industry Confidence
The Monthly Confidence Index from ELFA’s affiliate, the Equipment Leasing & Finance Foundation, dropped to 58.1 in March, as respondents grew slightly more pessimistic about conditions over the next four months.
About ELFA’s CFI
The CapEx Finance Index (CFI) is the only near-real-time index that reflects capex, or the volume of commercial equipment financed in the U.S. It is released monthly from Washington, D.C., one day before the U.S. Department of Commerce’s durable goods report. This financial indicator complements reports like the Institute for Supply Management Index, providing a comprehensive view of productive assets in the U.S. economy—equipment produced, acquired and financed. The CFI consists of two years of business activity data from a survey of industry leaders. For more details, including methodology and participants, visit www.elfaonline.org/CFI.
About ELFA
The Equipment Leasing and Finance Association (ELFA) represents financial services companies and manufacturers in the $1 trillion U.S. equipment finance sector. ELFA’s over 600 member companies provide essential financing that helps businesses acquire the equipment they need to operate and grow. Learn how equipment finance contributes to businesses’ success, U.S. economic growth, manufacturing and jobs at www.elfaonline.org.
Follow ELFA:
X: @ELFAonline
LinkedIn: https://www.linkedin.com/company/115191
Media/Press Contact: Krishna Magalona, PR Manager, ELFA, Krishna@360livemedia.com
PDF available: http://ml.globenewswire.com/Resource/Download/2c9bc990-d3e7-41bd-b8ba-30e898f165dd
January 2025: ELFA CapEx Finance Index Shows Demand Pulled Forward from Jan. to Dec.
Growth in new business volumes suggests durable goods orders will contract by 3.8% in January. Total new business volume (NBV) rose by $9.3 billion seasonally adjusted. Charge-offs (losses) dropped to 0.46%, the second decline in as many months. New activity at banks and captives both experienced a monthly drop of more than 30%, while financing at independents grew by almost 9%. The Monthly Confidence Index from ELFA’s affiliate, the Equipment Leasing & Finance Foundation, eased to 66.9 in February, as respondents grew slightly more pessimistic about conditions over the next four months. The CapEx Finance Index (CFI) is the only near-real-time index that reflects capex, or the volume of commercial equipment financed in the U.S. It is released monthly from Washington, D.C., one day before the Department of Commerce’s durable goods report. The ELFA represents financial services companies and manufacturers in the $1 trillion equipment finance sector.
Growth in new business volumes suggests durable goods orders will contract by 3.8% in January. Total new business volume (NBV) rose by $9.3 billion seasonally adjusted, a decline of 17.8% from December to January among surveyed ELFA member companies.
NBV year-to-date contracted by 6.4% from 2023 to 2024 on a seasonally adjusted basis, and the year-over-year change declined by 10.6% on a non-seasonally adjusted basis.
Charge-offs (losses) dropped to 0.46%, the second decline in as many months.
WASHINGTON, Feb. 26, 2025 (GLOBE NEWSWIRE) — “The latest CFI release showed that equipment demand was pulled forward from January to December, which caused volumes to underperform last month. Much of the overall decline came from the banking sector, which had a stellar yearend and a soft start to 2025. I expect conditions to normalize going forward, but risks to the outlook linger,” said Leigh Lytle, President and CEO at ELFA. “Global economic and political uncertainty remains elevated, which could weigh on equipment demand later this year as businesses decide to pause investment until tensions subside. As both aging receivables and charge-offs showed, the industry is well prepared for an extended period of uncertainty, or whatever else may be thrown its way in 2025.”
New business volume growth dropped. NBV growth experienced its largest one-month drop on record, falling by 17.8% from December to January. While the percentage decline was sharp, the dollar amount of new business was only at its lowest since March 2023. New activity at banks and captives both experienced a monthly drop of more than 30%, while financing at independents grew by almost 9%. The dollar amount of new business was still above its monthly average from January through November of 2024, while new activity at captives declined to its lowest level since January 2017.
Headcounts continue to decline. Employment in the equipment finance industry contracted for the third straight month, with the 12-month change dropping 3.5%. Employment at banks and captives continued to decline, while job gains at independents slowed.
Credit approvals jump. The average credit approval rate increased to 75.9% in January, up 1.6 percentage points, the largest increase since October 2023. The rates for banks, captives, and independents all rose.
Financial conditions remain healthy. Charge-offs dropped for the second consecutive month to 0.46%. The January decline brings the rate to just above levels experienced in the ten months prior to the November increase. Aging receivables over 30 days ticked up to 2.2% but remained low.
“Despite macro-economic and political uncertainty, we anticipate companies will still look for creative financing solutions,” said Mitch Rice, CEO of Commercial Capital Company. “They’re seeking greater flexibility and simplified, frictionless processes to address their evolving needs. Recognizing this demand, the industry is undergoing a widespread focus on technological enhancement to deliver more efficient and effective solutions and services. We’re embracing this shift when it comes to process automation and utilizing artificial intelligence.”
Industry Confidence
The Monthly Confidence Index from ELFA’s affiliate, the Equipment Leasing & Finance Foundation, eased to 66.9 in February, as respondents grew slightly more pessimistic about conditions over the next four months.
About ELFA’s CFI
The CapEx Finance Index (CFI), formerly the Monthly Leasing and Finance Index (MLFI-25), is the only near-real-time index that reflects capex, or the volume of commercial equipment financed in the U.S. It is released monthly from Washington, D.C., one day before the U.S. Department of Commerce’s durable goods report. This financial indicator complements reports like the Institute for Supply Management Index, providing a comprehensive view of productive assets in the U.S. economy—equipment produced, acquired and financed. The CFI consists of two years of business activity data from 25 participating companies. For more details, including methodology and participants, visit www.elfaonline.org/CFI.
About ELFA
The Equipment Leasing and Finance Association (ELFA) represents financial services companies and manufacturers in the $1 trillion U.S. equipment finance sector. ELFA’s 575 member companies provide essential financing that helps businesses acquire the equipment they need to operate and grow. Learn how equipment finance contributes to businesses’ success, U.S. economic growth, manufacturing and jobs at www.elfaonline.org.
Follow ELFA:
X: @ELFAonline
LinkedIn: https://www.linkedin.com/company/115191
Media/Press Contact: Catherine Lockwood, PR Manager, ELFA, catherine@360livemedia.com
A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/2b1a6575-a70f-4708-933c-8bc9d27c716f
Equipment Leasing and Finance Association CapEx Finance Index: October 2024
New data reveals a $10.5 billion or 5.1% increase in new business volume for equipment leases and loans from September to October, its largest jump since August 2023. Demand for business equipment withstood the worst inflationary shock in almost four decades and a surge in borrowing costs. The ELFA CapEx Finance Index showcases remarkably strong activity in inflation-adjusted lending and leasing. The 12-month change in employment edged down in October to 0.7%. Job gains in the industry have been healthy in 2024, and remained so in the latest data, a welcome sign after years of rising unemployment following the global pandemic. The Monthly Confidence Index from ELFA’s affiliate, the Equipment Leasing & Finance Foundation, is 67.5 in November, up from the October index of 61.8, and the highest level since August 2021. The ElFA is the only near-real-time index that reflects capex, or the volume of commercial equipment financed in the U.S.
Note to readers: ELFA has updated the name of the Monthly Leasing and Finance Index (MLFI-25) to the CapEx Finance Index (CFI) to better reflect what it measures and how it impacts the broader U.S. economy.
********************************************************************************************************
WASHINGTON, Nov. 26, 2024 (GLOBE NEWSWIRE) —
50bps rate cut sparks surge in equipment demand, driving new business growth and market momentum. Following the Federal Reserve’s interest rate cuts in September, new data reveals a $10.5 billion or 5.1% increase in new business volume for equipment leases and loans from September to October, its largest jump since August 2023. Building on last month’s impressive growth, the surge hints at a strong finish for equipment investment this quarter. In the face of increasing prices and borrowing costs, the ELFA CapEx Finance Index showcases remarkably strong activity in inflation-adjusted lending and leasing.
“The October CapEx Finance Index revealed an exceptional start to the fourth quarter for the equipment finance sector,” said Leigh Lytle, CEO and President of ELFA. “While the Federal Reserve’s 50bps rate cut provided a boost, the real story lies in the sector’s fundamental strength. Borrowers and lenders alike demonstrated resilience, with healthy credit approvals and robust balance sheets. Looking ahead, this momentum positions the sector to confidently navigate the challenges of 2025, whether it’s a slower pace of rate cuts or ongoing inflationary pressures.”
Business activity weathered inflation and high borrowing costs. Demand for business equipment withstood the worst inflationary shock in almost four decades and a surge in borrowing costs. As the figure below shows, after adjusting for inflation, new business volume hovered around $8 billion a month even as the economy underwent a historic sequence of events.
Employment growth slowed but remained positive. The 12-month change in employment edged down in October to 0.7%. Job gains in the industry have been healthy in 2024, and remained so in the latest data, a welcome sign after years of rising unemployment following the global pandemic.
Credit approvals remained steady. The percentage of credit applications approved ticked down for the second consecutive month to 75.1%. The approval rate has been hovering between 75% and 77% for a little over a year, a sign that credit conditions have not deteriorated despite elevated borrowing costs.
Lender balance sheets strengthened further. Charge-offs declined to 0.31%, their lowest level since January 2023, while the percentage of loans and leases past due by 30 days edged up slightly to 2.2% but remains near 2024 lows.
“All encouraging data points clearly demonstrate the resiliency and critical role of equipment finance to the U.S. economy,” said William C. Perry III, Executive Vice President & Group Head, Regions Equipment Finance Corporation. “As you consider further anticipated rate cut(s), capacity reshoring and the potential for 100% bonus being reinstated, we expect companies to increase investments in new technology, resources and production equipment. This should equate to increased demand for structured leasing and equipment finance products as companies look to maximize associated tax benefits. Having performed well over the past 24 months, the equipment finance sector is justly poised for growth as we head into 2025 and beyond.”
Industry Confidence
The Monthly Confidence Index from ELFA’s affiliate, the Equipment Leasing & Finance Foundation, is 67.5 in November, up from the October index of 61.8, and the highest level since August 2021.
About ELFA’s CFI
The CapEx Finance Index (CFI) is the only near-real-time index that reflects capex, or the volume of commercial equipment financed in the U.S. It is released monthly from Washington, D.C., one day before the U.S. Department of Commerce’s durable goods report. This financial indicator complements reports like the Institute for Supply Management Index, providing a comprehensive view of productive assets in the U.S. economy—equipment produced, acquired and financed. The CFI consists of two years of business activity data from 25 participating companies. For more details, including methodology and participants, visit www.elfaonline.org/CFI.
About ELFA
The Equipment Leasing and Finance Association (ELFA) represents financial services companies and manufacturers in the $1 trillion U.S. equipment finance sector. ELFA’s 575 member companies provide essential financing that helps businesses acquire the equipment they need to operate and grow. Learn how equipment finance contributes to businesses’ success, U.S. economic growth, manufacturing and jobs at www.elfaonline.org.
Follow ELFA:
X: @ELFAonline
LinkedIn: https://www.linkedin.com/groups/89692/
A photos accompanying this announcement are available at:
https://www.globenewswire.com/NewsRoom/AttachmentNg/4ca77f7d-d792-41f7-9a6f-02511181eca6
https://www.globenewswire.com/NewsRoom/AttachmentNg/9b6292f4-a57f-4c48-b218-e554c44db6ff