Introduction

After months of uncertainty around monetary policy and government shutdowns, October 2025 delivered encouraging news for equipment finance. New data released by the Equipment Leasing and Finance Association (ELFA) and its affiliate, the Equipment Leasing & Finance Foundation, shows that business borrowing for equipment remained strong despite market volatility. Companies signed $10.5 billion in new loans, leases and lines of credit in October, matching the year's monthly high and marking a 5.7% increase over October 2024. This momentum positions 2025 to be the second‑best year for equipment demand since the ELFA's CapEx Finance Index (CFI) survey began in 2006.

In this post, we unpack the latest data, explore what's driving the resilience in equipment demand and consider what it means for borrowers and lenders heading into 2026.

Breaking down the numbers

New business volumes

According to the CFI, total new business volume (NBV) among surveyed ELFA members reached $10.5 billion on a seasonally adjusted basis in October. Year‑to‑date NBV contracted 1.4% versus 2024, but on a non‑seasonally adjusted basis, October's volume represented a 5.7% year‑over‑year increase. The Foundation projects that growth in total NBV will exceed $117 billion for 2025, surpassing 2023 levels and making the year one of the strongest on record.

Small‑ticket deals, a key barometer of aggregate demand, grew by $3.7 billion in October — the largest monthly increase since mid‑2024 and a 13% rise from September. Among institution types, banks posted the biggest monthly increase, adding $4.8 billion in new volumes, while captive finance companies and independents increased by $3.3 billion and $2.2 billion, respectively.

Credit approval and performance

The industry‑wide credit approval rate remained high at around 79%, near the highest level since 2016. Banks recorded a record approval rate of 82.1%. Captives approved 82.0% of applicants, while independents approved 70.7%. These elevated approval rates suggest that lenders see credit quality as stable even with increased volumes.

Delinquencies ticked up to 2.2% in October, reversing a decline the month prior. However, the rate remains within the narrow band observed since mid‑2024. Loss rates declined slightly to 0.44%, the lowest reading since May. In the small‑ticket segment, the loss rate dropped to 0.57%, indicating that lenders are effectively managing risk despite higher deal counts. It is worth noting that while delinquencies rose at independents, banks' delinquency rates were essentially unchanged.

Sentiment and capital access

The Equipment Leasing & Finance Foundation's Monthly Confidence Index remains elevated at 59.9, marking six consecutive months above 59. Nearly 30 % of industry executives report improved access to capital for equipment purchases, and many expect that momentum to carry into 2026 even if the Federal Reserve pauses interest rate cuts.

Parallel indicators outside the equipment sector paint a mixed picture but offer some support for continued spending. The NAHB/Wells Fargo Housing Market Index (HMI) ticked up to 38 in November as builder confidence edged higher, though this remains below the midpoint of 50 that indicates optimism. Builders cited soft buyer traffic and high mortgage rates, but more than a quarter plan to increase production in anticipation of future demand.

Drivers of resilient demand

Several factors are supporting equipment investment despite macroeconomic uncertainties:

• Tax incentives. The reinstatement of 100% bonus depreciation and higher Section 179 expensing limits have made new equipment purchases more attractive. Many businesses accelerated purchases into 2025 to maximize deductions, particularly in construction, manufacturing and technology sectors.
• Stabilizing interest rates. While rates remain above pre‑2022 levels, the Federal Reserve has held its target range at 4.25% to 4.50% for several meetings. The prospect of future cuts has encouraged borrowers to lock in financing now, while lenders see limited downside in growing their portfolios. The Equipment Leasing & Finance Foundation notes that pent‑up demand is building as companies delayed purchases during the rate run‑up.
• Infrastructure and housing activity. Federal infrastructure funding continues to flow into transportation, utilities and public works projects, driving demand for heavy equipment and specialized machinery. In housing, builder sentiment remains subdued but stable, and rebuilding efforts in regions affected by wildfires and natural disasters have created localized spikes in demand for construction equipment.
• Technology upgrades. The AI boom and the rollout of edge computing and advanced telecommunications networks are prompting companies to finance servers, networking gear and specialized computing systems. Research from Monitor Suite suggests these alternative equipment categories represent a $43 billion annual financing opportunity, offsetting declines in traditional PC and server leasing.
• Operational efficiency. Companies are using financing to adopt automation, robotics and energy‑efficient equipment that reduce labor costs and improve sustainability. For example, energy‑efficient HVAC systems can lower electricity bills by up to 30%, and electric fleets help meet regulatory requirements and access tax credits.

Implications for borrowers and lenders

• Borrowers should act deliberately. With strong demand pushing some equipment delivery times into 2026, planning ahead is essential. Companies should gather financial documentation early and explore tax incentives to determine whether to purchase or lease. In a high‑approval environment, competitive bids through online marketplaces can yield better rates.
• Lenders must balance growth with prudence. Although approval rates and volumes are up, lenders should monitor portfolio concentrations and emerging risks. The trucking industry, for example, faces a projected shortage of 160,000 drivers by 2031, while retail closures are accelerating. Understanding the underlying business case for each piece of equipment and maintaining relationship depth will be critical to managing future losses.
• Watch the small‑ticket segment. As automation lowers processing costs, small‑ticket deals ($25,000 to $250,000) are becoming more profitable. However, lenders must ensure their infrastructure can handle high volumes efficiently. Platforms that automate credit decisioning, documentation and funding can reduce application costs from $427 to under $100, transforming unit economics.
• Prepare for continued volatility. While the outlook for early 2026 is positive, interest rate movements, geopolitical events and supply‑chain disruptions could quickly change the landscape. Both borrowers and lenders should build flexibility into contracts and consider hedging strategies where appropriate.

Conclusion

The October 2025 data underscores a resilient equipment finance market that continues to thrive despite headwinds. Strong new business volumes, high approval rates and sustained executive confidence point to a robust finish to 2025 and a promising start to 2026.

For businesses, this is an opportune moment to invest in the tools needed to grow, leveraging tax incentives and competitive financing options. For lenders, maintaining discipline while embracing new technologies and market segments will be key to capturing opportunities and managing risk.

Platforms like Arkra bring these elements together by streamlining the application process and connecting borrowers with multiple lenders, helping both sides navigate an evolving landscape with greater confidence.