Forecast
Rising new business volumes indicate durable goods orders will expand by 0.35% in December.
The Equipment Leasing and Finance Association (ELFA) reported an impressive surge in new business volume (NBV) to close out 2024. Total NBV reached $11.4 billion, marking an 8.1% increase from November and a 4.2% rise compared to 2023.
Meanwhile, charge-offs saw a welcome decline to 0.52% after an uptick in the prior month, signaling improved financial stability across the sector.
Industry Insights
“The equipment finance industry wrapped up 2024 on a high note, as we anticipated,” said Leigh Lytle, ELFA President and CEO. “A surge in bank financing fueled record-high business volumes, reflecting greater certainty following the election and tempered expectations for interest rate cuts in 2025. While growth may moderate in the coming months, December typically experiences a year-end boost. Federal policy changes in 2025—particularly deregulation—could further support demand for construction and mining equipment. That said, the industry is well-prepared for any potential turbulence in the year ahead.”
Bank Financing Leads the Charge
The rise in new business activity was primarily driven by bank financing, which soared 36.2% month-over-month. This sharp increase more than offset the 0.2% uptick in captive financing and the 5.3% contraction in independent financing. Notably, banks now account for nearly 62% of total NBV, their largest market share since before the Global Financial Crisis.
Employment Trends
Employment in the equipment finance sector continued to contract in December, with total headcount down nearly 2.0% from December 2023. Banks and captives experienced declines of 1.2% and 7.1%, respectively, though independents saw a 2.5% rise in hiring.
Credit Approvals Show Signs of Stability
The average credit approval rate ticked up to 74.3% in December, reversing its prior downward trend. While overall gains were modest, small-ticket financing approvals saw a significant one-month jump of 3.6 percentage points, the largest increase since March.
Financial Conditions Remain Healthy
Charge-offs declined to 0.52% of net receivables, rebounding from a sharp November increase. Meanwhile, aging receivables over 30 days edged up slightly to 2.0% but remained near two-year lows, suggesting continued financial resilience within the sector.
“Equipment finance remains buoyed by a strong U.S. economy, which ended 2024 on solid footing,” said Tina Eickhoff, CLFP, Senior Vice President, Head of Equipment Finance, U.S. Bank. “While 2024 was a strong year, we believe there is still significant pent-up demand for equipment purchases in 2025. With the election behind us and more clarity on interest rates and economic conditions, businesses will likely refocus on growth initiatives and new equipment acquisitions.”
Industry Confidence on the Rise
ELFA’s affiliate, the Equipment Leasing & Finance Foundation, reported that its Monthly Confidence Index climbed for the third consecutive month in January. Despite lingering uncertainty surrounding federal immigration and trade policies, industry executives remain optimistic about 2025 and the opportunities it may bring.
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.
