CAPEX FINANCE INDEX AUGUST 2025: DEMAND ROSE FOR SECOND CONSECUTIVE MONTH

The following information was released by the Equipment Leasing and Finance Association (ELFA):

Author Jane Esworthy

The CapEx Finance Index (CFI) 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 Feds 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 industrys activity following the recent shift in monetary policy.

FORECAST: The change in NBV suggests a 2.6% increase in new durable goods orders in August.

Total NBV among surveyed Equipment Leasing and Finance Association (ELFA) member companies was $10.0 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 were seeing a second consecutive month of improving demand, said Leigh Lytle, President and CEO at ELFA. 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, said Martin Golobic, CEO, GreatAmerica Financial Services. Augusts uptick in new business volume and the highest credit approval rate in two years signal strong underlying demand and confidence. As we look ahead, Im encouraged by the steady momentum and the industrys 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.

Industry Confidence

TheMonthly Confidence Index from ELFAs affiliate, the Equipment Leasing and Finance Foundation tracks the sentiment of executives in the industry. The index remains at a heightened level for the fourth consecutive month, relatively unchanged at 59.9 in September from 60.2 in August.

Technical Note

Newbusiness 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.

ELFA commissioned a white paper to explore the statistical relationship between CFI survey data and broader economic indicators. The report analyzes the capacity for various CFI measures to improve forecasting of key government statistics. The analysis finds strong evidence that many CFI indicators improve forecasting models of major economic statistics.

About ELFAs CFI

The CapEx Finance Index (CFI) is the only real-time dataset that tracks nationwide conditions in the equipment financing industry. The information is compiled from a diversified set of businesses that respond to questions about demand for equipment financing, employment, and changes in financial conditions. The resulting data is organized by institution type, such as banks, captives, and independents, and is classified into overall activity and financing for small ticket equipment and software. The CFI is released monthly from Washington, D.C., generally one day before the U.S. Department of Commerce's durable goods report. More detail on the data and methodology can be found at www.elfaonline.org/CFI.

About ELFA

The Equipment Leasing and Finance Association (ELFA) represents financial services companies and manufacturers in the $1.3 trillion U.S. equipment finance sector. ELFAs 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.