Equipment Finance Hits Record $14.3 Billion as Business Investment Accelerates

For most of the past two years, equipment finance had been growing without doing anything especially dramatic.

Then July happened.

New business volume surged to a record $14.3 billion, according to the Equipment Leasing & Finance Association’s latest CapEx Finance Index, blowing past the previous monthly high by $2.8 billion, or 24.5%. Through the first seven months of 2026, volume is now 16.8% ahead of the same period last year.

ELFA pointed to investment surrounding artificial intelligence as one of the forces behind the jump. That makes sense. The AI buildout requires far more than software. Data centers need servers, cooling systems, electrical infrastructure, backup power, and networking equipment, all of which represent enormous capital spending.

But the most interesting number in the report may actually be much smaller.

Small-Ticket Financing Had a Record Month Too

Small-ticket equipment financing reached $6.4 billion in July, an 84.5% increase and another record for the index. Year-to-date small-ticket activity is now running 25.9% above 2025.

That suggests this isn't simply a story about billion-dollar data centers.

Small and midsized businesses are also buying and financing vehicles, machinery, technology, medical equipment, and other assets needed to operate and expand.

For brokers who traditionally focus on working capital, that matters. A business seeking a short-term financing product today may also have a truck, piece of machinery or other asset that could be financed separately.

And more alternative lenders appear to be noticing.

Earlier this year, CAN Capital acquired Republic Bank Finance’s equipment finance business, expanding a company historically associated with alternative SMB working capital further into equipment-backed lending.

More Volume Without a Spike in Losses

Rapid growth usually brings another question: are lenders taking more risk to generate it?

So far, ELFA's numbers don't suggest a major deterioration.

Delinquencies edged up slightly to 1.8%, but remain near the low end of their two-year range. The average loss rate actually fell to 0.46%, its lowest level in nine months, while bank losses dropped to just 0.30%, their lowest reading since early 2023.

Approval rates declined to 77.4%, but ELFA said nearly all of that drop came from a relatively small portion of participating companies.

In other words, July delivered something lenders rarely complain about: substantially more originations without an accompanying surge in credit losses.

Now the Capital Has to Keep Up

The record also helps explain another trend Funder Intel has been following closely.

Institutional capital has been moving deeper into equipment and specialty finance.

Northbase Finance recently secured an up-to-$300 million revolving credit facility from Oaktree to support equipment financing. Private capital manager Wafra acquired Navitas Credit in a transaction valued at approximately $1.9 billion. And alternative finance companies such as CAN Capital are expanding further into the product.

Those transactions become more meaningful if the market is about to grow as much as ELFA now expects.

The association has raised its 2026 forecast to approximately $137.3 billion in new business volume, which would make this the strongest year in the history of the index and roughly 14% above the previous record.

At that level, the industry doesn't just need borrowers.

It needs a lot more money sitting behind the lenders financing them.

That may ultimately become the bigger story for the second half of 2026. ELFA says demand remains strong, while elevated long-term yields could put pressure on lenders' funding costs.

For larger originators with institutional credit facilities, diversified warehouse lines and access to securitization markets, that may create an advantage. Smaller finance companies could find themselves with plenty of deals to fund but more expensive capital with which to do it.