U.S. businesses increased borrowing to fund equipment purchases in December 2025, with new loans, leases, and lines of credit totaling $10.6 billion on a seasonally adjusted basis, according to the Equipment Leasing and Finance Association (ELFA). The trade group said the total was up from the prior month and represented the second-highest level on record, underscoring continued demand for machines, technology, and other capital goods despite a mixed economic backdrop.
On a year-over-year basis, ELFA reported borrowing rose 5.9% versus December 2024. The reading offers a snapshot of business investment appetite at a time when companies are balancing expansion plans with uncertainty about growth, labor costs, and the direction of interest rates.
Banks Dip While Broader Financing Holds Up
While overall equipment finance volumes strengthened, ELFA noted that bank-related activity softened on a month-to-month basis. The association said activity at banks was down 1.2% from the prior month, a detail that suggests lending conditions may be uneven across channels even as total financing remains elevated.
ELFA’s data tracks a market the group values at more than $1 trillion, covering financing tied to a wide range of business assets, from transportation and industrial equipment to information technology. The monthly snapshot is published via ELFA’s CapEx Finance Index, which aggregates leasing and finance activity across participating institutions.
The index is based on a 25-member survey that includes major lenders and financing arms connected to large manufacturers and technology providers. ELFA cited participants such as Bank of America and finance units tied to Caterpillar, Dell Technologies, Siemens, Canon, and Volvo.
Industry Sees Resilience Despite Uncertainty
In a statement accompanying the release, Leigh Lytle, ELFA’s president and chief executive, said recent readings point to an industry that has remained resilient even through periods of heightened volatility. She said ELFA expects “some volatility” in 2026, while indicating that demand conditions still appear supportive.
ELFA linked that steadiness partly to expectations for the interest-rate environment. Lytle said markets anticipate additional rate cuts later in the year, a dynamic that can influence leasing and loan demand by reducing financing costs and supporting the economics of large capital purchases.
Equipment financing is often watched as a practical indicator of how confident companies feel about the near-term outlook. When firms are expanding capacity, modernizing fleets, or upgrading technology, borrowing tends to rise; when executives become more cautious, financing can slow even if profits remain stable.
Confidence Measure Improves Alongside Investment Signals
A separate gauge tied to the sector also strengthened. The Equipment Leasing & Finance Foundation, ELFA’s nonprofit affiliate, said its business confidence index rose to an 11-month high of 64.6 in January, up from 58.3 in December. A reading above 50 signals a positive outlook, indicating respondents were, on balance, more optimistic about conditions in the months ahead.
The ELFA update aligns with other recent indicators pointing to continued business investment momentum. In a separate report, U.S. “core” capital goods orders—a commonly cited proxy for business spending on equipment—posted a fifth consecutive monthly gain in November 2025, reflecting ongoing demand for investment goods even as parts of manufacturing faced crosscurrents.
Taken together, the data suggest many firms are still committing funds to long-lived assets, a trend that can support productivity and output over time. At the same time, the mix of higher overall financing alongside a month-to-month dip in bank activity indicates that the cost and availability of credit may vary by lender type, borrower profile, and asset category, factors that can shape how quickly businesses move from planning to purchasing.
