US business borrowing for equipment rises over 5% in December, ELFA says

• December equipment financing totaled $10.6 billion on a seasonally adjusted basis, up 5.9% from a year earlier and representing the second-highest level ever recorded
• The ELFA confidence index jumped to 64.6 in January from 58.3 in December, an 11-month high, with readings above 50 indicating positive business outlook
• ELFA expects continued strong demand and stable financial conditions in 2026, particularly as markets anticipate additional interest rate cuts later this year

Summary

U.S. business borrowing for equipment purchases increased 5.9% year-over-year in December, reaching $10.6 billion on a seasonally adjusted basis—the second-highest level on record, according to the Equipment Leasing and Finance Association (ELFA).

Key Figures:

• New loans, leases, and credit lines totaled $10.6 billion in December (seasonally adjusted)
• Year-over-year growth: 5.9%
• Month-over-month: Increased from November levels
• Bank activity declined 1.2% from the prior month
• ELFA Confidence Index reached an 11-month high of 64.6 in January, up from 58.3 in December

Companies and Sectors:

The ELFA survey includes 25 members, featuring major players such as Bank of America and financing units of Caterpillar, Dell Technologies, Siemens AG, Canon, and Volvo AB. The equipment finance sector is valued at over $1 trillion.

Market Implications:

ELFA President Leigh Lytle characterized the performance as evidence the industry has "thrived amid historic uncertainty." The organization expects continued strong demand and stable financial conditions in 2026, despite anticipated volatility. The outlook is supported by expectations of additional interest rate cuts later this year.

The confidence index reading above 50 signals a positive business outlook, suggesting companies remain optimistic about capital expenditure investments. The robust borrowing activity indicates ongoing business expansion and equipment investment despite economic uncertainties, positioning the sector favorably for 2026.