Uncategorized Archives - Equipment Leasing & Finance Foundation

Equipment Leasing & Finance Foundation Accepting Applications for 10 $5,000 Scholarships to Promote Careers in the Equipment Finance Industry

Washington, DC, January 13, 2025—The Equipment Leasing & Finance Foundation is accepting applications for its scholarship program for the 2025-2026 academic year. Up to 10 scholarships of $5,000 each will be awarded to full-time undergraduate or full-time graduate students interested in pursuing a career in the equipment finance industry who are majoring in business, economics, finance, or a related discipline.

Since the launch of the Foundation’s scholarship program six years ago, 29 students have received scholarships. The program was developed to support the Foundation’s mission to attract new and diverse talent to the industry.

To be eligible for consideration for a scholarship in 2025, candidates must submit their applications online by May 2, 2025, and must:

Be a full-time undergraduate student, or full-time graduate student, as defined by the accredited educational institution they are attending;
Have declared his/her/their major course work to be in the field of business, economics, finance, or a related discipline; and
Have a minimum cumulative grade point average of 3.0.
Students with recommendations from professionals in the equipment finance industry will be given preference.

To learn more or to apply for a scholarship, visit https://www.leasefoundation.org/academic-programs/home/scholarship-program/.

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ABOUT THE FOUNDATION
The Equipment Leasing & Finance Foundation is a 501c3 non-profit organization with a mission to advance the $1.3 trillion equipment finance sector by producing data-forward research and market outlooks, as well as cultivating the next-generation workforce through Campus to Career programs, including curriculum development and collegiate scholarships. Founded in 1989 and 100% funded through charitable donations, the Foundation drives innovation and career development for the future of the industry. www.leasefoundation.org

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Media Contact: Kelli Nienaber, knienaber@leasefoundation.org

2025 Equipment Leasing & Finance Industry Snapshot Now Available

The Equipment Leasing & Finance Foundation has released the 2025 Equipment Leasing & Finance Industry Snapshot, an indispensable information resource for industry participants. Designed for use in executive briefings and presentations, the slide deck summarizes the current conditions and projections for the U.S. economy and equipment finance industry with clear, easy-to-digest charts and short narratives of key trends.

Among the wide range of details in the 2025 Snapshot:

The Foundation projects that the U.S. economy will grow by 2.7%.
- The U.S. economy expanded at 2.8% (SAAR) in Q3 2024, a slight decrease from 3.0% growth in Q2.
- Three key factors boosted the U.S. economy in 2024 and set the stage for continued economic growth in 2025: 1) a strong labor market, 2) rising household wealth, and 3) remarkably resilient consumer spending.
Economic tailwinds:
- Q3 growth was primarily driven by consumer spending, supported by a boost in government spending and business investment.
Economic headwinds include negative growth in private inventories, residential investment, and net exports.
Equipment and software investment is expected to grow at a 4.7% annualized pace in 2025.
- Equipment and software investment expanded 7.5% in Q3 (annualized) after growing 7.0% in Q2. Growth was positive in seven of 12 tracked verticals.
- Moderate growth is expected during the first half of the year with upside potential later in the year if inflation cools further toward 2%, and the Fed responds by further lowering interest rates.
By equipment type,
- Six of 12 verticals are exhibiting recent momentum that is stronger than historical norms, including computers and mining & oilfield machinery.
- Investment growth in other industrial equipment and trucks appears set to shrink in the coming six months.
New business volume growth reported in ELFA’s CapEx Finance Index (formerly the MLFI-25) in October was up 11.9% Y/Y, 5.1% M/M, and up 3.7% YTD, outpacing the rate of inflation.
Special Topic – Trump’s Second Term – An overview of three key policy areas in the new administration:

- Tariffs – As an economic strategy, economic consequences and retaliation, and uncertainty and opportunities.
- Taxes – The 2017 Tax Cuts and Jobs Act, impact of new legislation on investment, and potential long-term implications.
- Industrial Policy – Policy priorities are likely to shift regarding renewable energy, domestic manufacturing, and infrastructure development projects, with the effect on equipment demand unclear.

Prepared by Keybridge Research, the snapshot is available for free download at https://www.leasefoundation.org/industry-resources/industry-snapshot/

Media contact: Kelli Nienaber, knienaber@leasefoundation.org

Equipment Finance Industry Confidence in December Reaches New Three-Year High

Washington, DC, December 19, 2024 – The Equipment Leasing & Finance Foundation (the Foundation) releases the December 2024 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) today. Overall, confidence in the equipment finance market is 68.8, surpassing the November index of 67.5, the previous three-year high. The index reports a qualitative assessment of both the prevailing business conditions and expectations for the future as reported by key executives from the $1.3 trillion equipment finance sector.

When asked about the outlook for the future, MCI-EFI survey respondent David Normandin, CLFP, President and Chief Executive Officer, Wintrust Specialty Finance, said, “Over the last year, the equipment finance industry has witnessed changes in liquidity, volatile swap rates, higher delinquency, and credit charges returning to a more normalized state. Through this, we have adapted and created better solutions to meet our customers’ needs. Now that the election is over and the Fed has begun cutting rates, I think there is more surety for businesses to confidently invest in their business. This will create good opportunities for the equipment finance industry in 2025.”

December 2024 Survey Results:
The overall MCI-EFI is 68.8, up from the November index of 67.5.

Business conditions – When asked to assess their business conditions over the next four months, 57.1% of the executives responding said they believe business conditions will improve over the next four months, an increase from 43.3% in November. 32.1% believe business conditions will remain the same over the next four months, down from 50% the previous month. 10.7% believe business conditions will worsen, up from 7% in November.
Capex demand – 6% of the survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, up from 48.3% in November. 42.9% believe demand will “remain the same” during the same four-month time period, down from 44.8% the previous month. 3.6% believe demand will decline, a decrease from 6.9% in November.
Access to capital – 28.6% of the respondents expect more access to capital to fund equipment acquisitions over the next four months, down from 37.9% in November. 71.4% of executives indicate they expect the “same” access to capital to fund business, up from 62.1% last month. None expect “less” access to capital, unchanged from the previous month.
Employment – When asked, 46.4% of the executives report they expect to hire more employees over the next four months, an increase from 44.8% in November. 42.9% expect no change in headcount over the next four months, down from 48.3% last month. 10.7% expect to hire fewer employees, up from 6.9% in November.
U.S. economy – 7.1% of the leadership evaluate the current U.S. economy as “excellent,” up from none the previous month. 89.3% evaluate the economy as “fair,” down from 96.7% in November. 3.6% evaluate it as “poor,” relatively unchanged from 3.3% last month.
Economic outlook – 6% of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, down from 60% in November. 35.7% indicate they believe the U.S. economy will “stay the same” over the next six months, down from 36.7% last month. 10.7% believe economic conditions in the U.S. will worsen over the next six months, an increase from 3.3% the previous month.
Business development spending – In December, 46.4% of respondents indicate they believe their company will increase spending on business development activities during the next six months, up from 36.7% the previous month. 50% believe there will be “no change” in business development spending, a decrease from 56.7% in November. 3.6% believe there will be a decrease in spending, down from 6.7% last month.

December 2024 MCI-EFI Survey Comments from Industry Executive Leadership:

Bank, Small Ticket
“Political changes at the federal level are encouraging to small business. Changes to green energy policy and federal oversight [Section 1071] could lead to a more robust environment.” Charles Jones, Senior Vice President, 1^st Equipment Finance, Inc.

Captive, Small Ticket
“Economic resilience and growth, the continued adoption of technology and digitization, and government infrastructure initiatives are increasing demand. The new administration may slow the shift toward sustainability and the equipment requirements needed.” Jim DeFrank, EVP and Chief Operating Officer, Isuzu Finance of America, Inc.

Independent, Small Ticket
“The president-elect is expected to make a number of changes that will positively impact the U.S. economy.” James D. Jenks, CEO, Global Finance and Leasing Services, LLC

How may I access the MCI-EFI?
Survey results are posted on the Foundation website, https://www.leasefoundation.org/industry-resources/monthly-confidence-index/. Details about the MCI, including who participates, how it’s designed, and the survey respondent demographics are also available at the link above.

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ABOUT THE FOUNDATION
The Equipment Leasing & Finance Foundation is a 501c3 non-profit organization that propels the equipment finance sector—and its people—forward through industry-specific knowledge, intelligence, and student talent development programs that contribute to industry innovation, individual careers, and the advancement of the equipment leasing and finance industry. The Foundation is funded through charitable individual and corporate donations. Learn more at www.leasefoundation.org

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Media Contact: Kelli Nienaber, knienaber@leasefoundation.org

U.S. Economy Positioned for Growth as 2025 Economic Outlook Forecasts 4.7% Expansion in Equipment & Software Investment, 2.7% Increase in GDP

Washington, DC, December 18, 2024 – After a strong performance in 2024, the U.S. economy will continue to benefit from a solid labor market, rising household wealth, and resilient consumer spending next year according to the 2025 Equipment Leasing & Finance U.S. Economic Outlook. Real equipment and software investment growth is projected to be 4.7% in 2025, roughly on par with growth in 2024 with stronger investment activity expected in the latter half of the year. The report, which was prepared by Keybridge and released today by the Equipment Leasing & Finance Foundation, also forecasts real GDP growth of 2.7% next year, similar to the estimated 2.8% growth observed in 2024.

The Foundation’s report is focused on the $1.3 trillion equipment leasing and finance industry, and highlights key trends in equipment investment, placing them in the context of the broader U.S. economic climate.

Leigh Lytle, President of the Foundation, and President & CEO of the Equipment Leasing and Finance Association, said, “The economy blew past expectations in 2024 as strong consumer spending and business investment pushed growth above trends experienced prior to the pandemic. Data on new loan volume from ELFA’s CapEx Finance Index and executive sentiment in the Foundation’s Monthly Confidence Index suggest that momentum carried through to the fourth quarter, and lines the economy up for a strong 2025. That said, the potential for a trade war and persistent inflation could cause the Federal Reserve to slow the pace of rate decreases, which would weigh on the U.S. economy. Time will tell how all of these things shake out, but if we’ve learned one thing from 2024, it’s to never bet against the strength of American consumers or the resiliency of American business.”

Highlights from the 2025 Outlook include:

Equipment and software investment expanded 7.5% (annualized) in Q3, the second consecutive quarter of solid growth. Aircraft investment, which has more than doubled since Q1, was again primarily responsible for the strong performance. Growth in computers and communication equipment has also been strong, while construction machinery investment contracted again.
The U.S. economy continues to outperform its international peers. Despite the unprecedented downturn in early 2020, the U.S. economy is roughly 11% larger in inflation-adjusted terms than it was at the end of 2019, faring far better than other major economies. Businesses are more optimistic about their prospects in 2025, in part due to the prospects of lower taxes and less regulation under the incoming Trump administration and a Republican-controlled Congress. However, uncertainty remains regarding potential tariffs, tax cuts for manufacturers, and changes to clean energy funding.
Looking to Fed policy, the December employment report confirmed that the labor market remains generally healthy, with 227K jobs created in November and upward revisions to the previous two months’ data. These data align with Fed Chair Jay Powell’s description of recent economic performance as “remarkably good” and “not sending any signals [for] the need to be in a hurry to lower rates.” Nonetheless, markets overwhelmingly predict another rate cut at the Fed’s December 18^th In 2025, FOMC members will closely monitor upside risks to inflation and downside risks to employment.

The Foundation-Keybridge U.S. Equipment & Software Investment Momentum Monitor, which is released in conjunction with the Economic Outlook, tracks 12 equipment and software investment verticals. In addition, the Momentum Monitor Sector Matrix provides a customized data visualization of current values of each of the 12 verticals based on recent momentum and historical strength. This month two verticals are expanding, two are peaking, four are recovering, and four are weakening. Over the next three to six months the Foundation expects the following trends to materialize on a year-over-year basis:

Agriculture machinery investment growth is likely to weaken further.
Construction machinery investment growth is expected to remain weak.
Materials handling equipment investment growth will remain positive and could strengthen.
All other industrial equipment investment growth will remain weak.
Medical equipment investment growth should stay positive.
Mining and oilfield machinery investment growth should improve.
Aircraft investment growth may have peaked and is likely to decline.
Ships and boats investment growth is expected to remain in contractionary territory.
Railroad equipment investment growth may weaken but should remain positive.
Trucks investment growth will be weak or negative.
Computers investment growth should remain strong.
Software investment growth will remain positive, but this month’s sizable momentum decline is worth monitoring in the months ahead.

The Foundation produces the Equipment Leasing & Finance U.S. Economic Outlook report in partnership with economic and public policy consulting firm Keybridge Research. The annual economic forecast provides the U.S. macroeconomic outlook, credit market conditions, and key economic indicators. The report will be updated quarterly throughout 2025.

Download the full report at https://www.leasefoundation.org/industry-resources/u-s-economic-outlook/.

Download the Momentum Monitor at https://www.leasefoundation.org/industry-resources/momentum-monitor/.

All Foundation studies are available for free download from the Foundation’s online library at http://store.leasefoundation.org/.

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Media Contact: Kelli Nienaber, knienaber@leasefoundation.org

New Foundation Report Reveals Innovations, Challenges, and Opportunities in the Construction Industry

Washington, DC, December 12, 2024 – An increasingly complex environment of continuous change and multiple challenges contributes to the mixed outlook for the U.S. construction industry. In 2024, factories, bridges, and roads are expected to be the winning sectors, while warehouse and office construction will be challenged, according to a new study, “Vertical Market Outlook Series: Construction,” released by the Equipment Leasing & Finance Foundation (Foundation).

The study provides an overview of the U.S. construction industry addressing such topics as macroeconomic factors, technological innovations, and other developments that will impact the industry going forward. It is the 11^th release of the Foundation’s forward-looking Vertical Market Outlook Series designed to help readers recognize and understand opportunities and challenges that may affect their businesses.

“The construction industry is consistently among the top end-users of equipment finance, and construction equipment a top-financed asset category, so this study should be of interest to a wide swath of our industry,” said Will Tefft Foundation Research Committee Member and Equipment Manager – EverBank Corporate Asset Finance “Equipment finance professionals will find the broad range of topics examined insightful for use in their strategic planning, and as a guide to the trends and issues to monitor to benefit their customers.”

The report was commissioned by the Foundation and prepared by global advertising, technology, and data company Big Village, which also produced the previous studies in the Vertical Market Outlook Series. The new study presents data and research from a variety of sources, and examines a range of issues, including:

- Government infrastructure investments through legislation such as the Infrastructure Investment and Jobs Act (IIJA)
- Economic factors such as high interest rates and inflationary pressures that can increase equipment, material, and labor prices
- Labor shortages/rising labor costs
- Pressure from both regulations and customers to implement decarbonization and environmentally-friendly practices
- Tighter lending standards, lower risk tolerance by lenders, and increased financing costs
- Options for acquiring equipment
- High levels of construction bankruptcies and loan delinquencies
- M&A activity with a trend toward private equity firms purchasing construction and construction-related companies
- Investment in technologies including, AI & big data innovations, automation/digitization/internet of things (IoT)/augmented reality, building information modeling, cloud-based technology, additive manufacturing/3D printing, drones/aerial imaging, and new battery technology.

Download the full report at https://www.leasefoundation.org/industry-resources/vertical-outlook/.

All Foundation studies are available for free download from the Foundation’s online library at http://store.leasefoundation.org/.

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Equipment Finance Industry Confidence Reaches Three-Year High

Washington, DC, November 21, 2024 – The Equipment Leasing & Finance Foundation (the Foundation) releases the November 2024 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) today. Overall, confidence in the equipment finance market is 67.5, up from the October index of 61.8, and the highest level since August 2021. The index reports a qualitative assessment of both the prevailing business conditions and expectations for the future as reported by key executives from the $1.3 trillion equipment finance sector. Approximately half of the survey responses were submitted prior to the elections and half were submitted after.

When asked about the outlook for the future, MCI-EFI survey respondent Charles Jones, Senior Vice President, 1^st Equipment Finance, Inc., said, “Businesses still need equipment. Political uncertainty has had an impact and should resolve itself. With the election behind us, businesses will need to continue to operate and look to grow. Calmer heads seem to be prevailing and the industry is coming back. Delinquency has hopefully leveled, and lenders are licking their wounds and looking forward.”

November 2024 Survey Results:
The overall MCI-EFI is 67.5, up from the October index of 61.8

Business conditions – When asked to assess their business conditions over the next four months, 43.3% of the executives responding said they believe business conditions will improve over the next four months, an increase from 37.9% in October. 50% believe business conditions will remain the same over the next four months, down from 51.7% the previous month. 6.7% believe business conditions will worsen, down from 3% in October.
Capex demand – 48.3% of the survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, up from 44.8% in October. 44.8% believe demand will “remain the same” during the same four-month time period, up from 41.4% the previous month. 6.9% believe demand will decline, a decrease from 13.8% in October.
Access to capital – 37.9% of the respondents expect more access to capital to fund equipment acquisitions over the next four months, up from 27.6% in October. 62.1% of executives indicate they expect the “same” access to capital to fund business, down from 72.4% last month. None expect “less” access to capital, unchanged from the previous month.
Employment – When asked, 44.8% of the executives report they expect to hire more employees over the next four months, an increase from 24.1% in October. 48.3% expect no change in headcount over the next four months, down from 65.5% last month. 6.9% expect to hire fewer employees, down from 10.3% in October.
U.S. economy – None of the leadership evaluate the current U.S. economy as “excellent,” down from 6.9% the previous month. 96.7% evaluate the economy as “fair,” up from 93.1% in October. 3.3% evaluate it as “poor,” an increase from none last month.
Economic outlook – 60% of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, up from 37.9% in October. 36.7% indicate they believe the U.S. economy will “stay the same” over the next six months, down from 51.7% last month. 3.3% believe economic conditions in the U.S. will worsen over the next six months, a decrease from 10.3% the previous month.
Business development spending – In November, 36.7% of respondents indicate they believe their company will increase spending on business development activities during the next six months, up from 34.5% the previous month. 56.7% believe there will be “no change” in business development spending, an increase from 55.2% in October. 6.7% believe there will be a decrease in spending, down from 10.3% last month.

November 2024 MCI-EFI Survey Comments from Industry Executive Leadership:

Independent, Small Ticket
“I’m still concerned about the state of the consumer and the U.S. from a debt load perspective, but more optimistic on growth after the U.S. election cycle.” Mark Bonanno, President and COO, North Mill Equipment Finance

“The election is over. Looking forward, Trump’s policies will improve the economy and begin reducing government over-regulation.” James D. Jenks, CEO, Global Finance and Leasing Services, LLC

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Equipment Leasing & Finance Foundation Elects Officers, Welcomes New Trustees, and Presents Research Award During Annual Meeting

Washington, DC, November 19, 2024 – The Equipment Leasing & Finance Foundation (Foundation) announces the 2025 officers of its Board of Trustees (Board). Board Officers serving are Zack Marsh, CLFP, SVP, Accounting and Analysis, AP Equipment Financing as Chair; Miles Herman, CEO, LEAF Commercial Capital, Inc. as Vice Chair; Peter Bullen, EVP & Group Head, Key Equipment Finance as Secretary/Treasurer; and Leigh Lytle, President and CEO, Equipment Leasing and Finance Association (ELFA) as President. Nancy Pistorio, CLFP, President, Madison Capital LLC is Immediate Past Chair. The officer elections were held during the Board‘s annual meeting.

New members appointed to the Foundation Board of Trustees include Eric McGriff, Chief Risk Officer, 36^th Street Capital, and Shari Williams, Chief Risk Officer, SLR Equipment Finance.

“We are privileged to have the leadership experience, professional expertise and commitment of our Trustees to guide the Foundation in 2025,” said Zack Marsh. “We’re grateful for their dedication to the Foundation’s mission to advance the equipment finance industry and the success of everyone in it.”

Trustees continuing on the Board for 2025 are:

Andrew Blacklock, Vice President, Strategy and Business Operations, Cisco Systems Capital Corporation
Jim DeFrank, EVP and Chief Operating Officer, Isuzu Finance of America, Inc.
Jeffrey Dicosola, Sales Manager, Great American Insurance Group
Cindy Fleck, CLFP, Senior Vice President and General Manager Equipment Finance, Channel
Martin Klotzman, CLFP, Director of Marketing and Operations, Ivory Consulting Corporation
Shari Lipski, CLFP, Principal, ECS Financial Services, Inc.
Mark Loken, Vice President, CoBank Farm Credit Leasing
David Normandin, CLFP, President and CEO, Wintrust Specialty Finance
Brittany Ogden, Attorney, Partner, Quarles & Brady LLP
Ricardo E. Rios, CFA, CLFP, President & COO, Commercial Equipment Finance, Inc. (CEFI)
William Tefft, Equipment Manager – Corporate Asset Finance, EverBank Corporate Asset Finance
Donna Yanuzzi, EVP, 1st Equipment Finance, Inc.

Kelli Nienaber will continue to serve as Executive Director.

Steven R. LeBarron Award
Research Committee Chair Valerie Gerard honored Board Trustee Will Tefft with the Steven R. LeBarron Award for Principled Research. He has been a member of the Foundation Research Committee (FRC) and a Foundation Trustee since 2020. In that time, he has been the lead in developing the Foundation’s Vertical Market Outlook Series of reports and the associated vertical podcast series. He has been instrumental in the development of podcast episodes covering trucking, IT equipment, additive manufacturing, and corporate aircraft, among other topics. This award is presented annually in memory of Steven LeBarron to the FRC member who demonstrates the insight, fortitude, and dedication he exemplified.

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Q4 2024 Equipment Leasing & Finance Industry Snapshot Now Available

The Equipment Leasing & Finance Foundation has released the Q4 2024 Equipment Leasing & Finance Industry Snapshot, an indispensable information resource for industry participants. Designed for use in executive briefings and presentations, the slide deck summarizes the current conditions and projections for the U.S. economy and equipment finance industry with clear, easy-to-digest charts and short narratives of key trends.

Among the wide range of details in the Q4 2024 Snapshot:

The Foundation projects that the U.S. economy will grow by 2.7%.
- The U.S. economy expanded at 3.0% (SAAR) in the second quarter of 2024, an increase from 1.6% growth in Q1 2024.
- Overall, a recession in 2024 remains unlikely. Layoffs remain low by historical standards and real wage growth is healthy, inflation is modestly elevated but largely contained, and the prospect for additional rate cuts later this year and next year should provide a boost to hiring and investment.
Economic tailwinds include consumer spending supported by a boost in inventories, business investment, and government spending.
Economic headwinds include negative growth in residential investment and net exports.
Equipment and software investment is expected to grow at a 4.4% annualized pace in 2024.
- E&S investment expanded 7.0% in Q2 (annualized) after growing by 4.0% in Q1, and is expected to moderate in the latter half of 2024.
- Business investment grew in Q2, rising 3.9% (annualized). Growth contracted slightly from 4.5% in the previous quarter.
By equipment type, investment growth in the coming six months appears set to
- Expand in ships & boats and aircraft.
- Decline in construction machinery, medical equipment, railroad equipment, and trucks.
New business volume growth reported in ELFA’s Monthly Leasing and Finance Index in August was down 10% year-over-year, but remained up 3.5% year-to-date.
Special Topics:
- Economic impact of tariffs – While tariffs have their place in U.S. trade policy, broad application would damage growth.
- A Softening Labor Market Sparks Economic Anxiety – A period of normalization or a period of slowing?

Prepared by Keybridge Research and updated quarterly, the snapshot is available for free download at https://www.leasefoundation.org/industry-resources/industry-snapshot/

Media contact: Kelli Nienaber, knienaber@leasefoundation.org

Equipment Finance Industry Expands to More Than $1.3 Trillion as Sector Supports U.S. Economic Growth and Innovation, Foundation Horizon Report Finds

End-users expect to increase their equipment and software acquisitions in 2025 with 77% using financing

Washington, DC, October 28, 2024—The equipment finance industry expanded to an estimated $1.34 trillion in 2023—a new all-time high—with 82% of end-users using some form of financing to fund their equipment and software (E&S) acquisitions, according to an end-user survey from the Equipment Finance Industry Horizon Report 2024. The report, which was released today by the Equipment Leasing & Finance Foundation and prepared by Keybridge, also reveals that approximately 57.7% of the $2.3 trillion (nominal) in E&S investment in 2023 was financed.

The Horizon Report focuses on the Foundation’s biennial survey of equipment end-users, which was conducted this summer. Using data collected through the survey, the Foundation estimates the current size of the equipment finance industry, assesses the propensity to finance private sector equipment investment for key equipment verticals, and forecasts end-user plans to acquire and finance equipment in 2025.

Leigh Lytle, President of the Foundation, and President & CEO of the Equipment Leasing and Finance Association, said, “The trillion-dollar equipment finance industry has always been the backbone of capital investment, which is a critical component of the U.S. economy. This Horizon Report clearly shows the extent to which businesses and other organizations rely on commercial financing with the majority of public and private sector capital expenditures acquired through loans, leases, or lines of credit. Our industry financed supply chains and supported business growth that helped stave off recessionary pressures amid elevated inflation and high interest rates, enabling equipment and software investment to expand in 2023. The report also indicates the industry is well positioned to support forecasted increases in equipment and software, including innovative, high-growth areas like generative AI, equipment-as-a-service (EaaS) subscription-based models, and climate financing. This report delivers must-have insights that will help business leaders and decision makers stay ahead of the game.”

Highlights from the Horizon Report include:

Equipment finance industry growth. According to official government figures, E&S investment (both financed and not financed) expanded by a solid 5.3% in 2023 to $2.3 trillion (nominal). The Foundation’s estimate that approximately 57.7% of this investment (and 64.2% of private sector investment, per the end-user survey) was financed yields an estimated industry size of $1.34 trillion. This figure represents 7.1% nominal growth for the equipment finance industry compared to 2022.
End-user reliance on financing. The end-user survey revealed that 82% of respondents who acquired equipment or software in 2023 used at least one form of financing to do so. This represents a slight uptick from the 79% of respondents indicated in the 2022 survey.
Increase in equipment and software acquisitions in 2025. End-users were roughly three times more likely to believe their E&S acquisitions will increase in 2025 (42%) versus decrease (15%). The most commonly selected verticals among end-users who plan to boost acquisitions were software, computers, office equipment, and communications equipment, reflecting the importance of these verticals to business operations in which hybrid/remote working arrangements, online sales channels, and incorporating AI and other new technology tools are critical. Importantly, more than three-fourths of end-users expect to use a financing method to cover at least a portion of the cost to acquire this equipment.
Emerging industry growth drivers. Tracking emerging trends in the equipment finance industry, the Foundation’s 2024 survey finds that currently, 42% of E&S end-users use generative AI in their businesses, and an additional 42% indicated that they intend to do so over the next two years. Regarding EaaS, half of end-users already use a subscription-based model for equipment and an additional 23% indicated that they intend to pursue this option in 2025. Meanwhile, nearly one-third of E&S was acquired to support energy-related, climate-related, or other environmental goals and pledges in 2023. With global climate finance expected to grow to $9 trillion by 2030, this is likely to be a key area of growth for the industry in the years ahead.
Top methods of payment to acquire equipment and software. According to the end-user survey, the most important payment method used by businesses to acquire equipment and software in 2023 was leasing (26% of total acquisitions), followed by secured loans (16%), lines of credit (14%), and unsecured loans (8%). Among non-financed acquisitions, paid-in-full credit card purchases were the most prevalent payment method (20%) followed by cash (16%).
Top reasons for financing. The top reasons end-users chose to finance their E&S acquisitions were “optimization of cash flow” (62%), “protection from equipment obsolescence” (55%), and “tax advantages” (51%).

Zack Marsh, Chair of the Equipment Leasing & Finance Foundation and SVP, Accounting and Analysis, AP Equipment Financing, said, “The Horizon report offers a detailed look at equipment acquisition and financing decisions for specific equipment verticals and industries, the key factors influencing the decision to use financing, and how financing decisions are likely to evolve over the next year. Looking ahead, both the report end-user survey and the overall economy provide reason to be optimistic about the industry’s prospects in 2025. Equipment finance industry executives can use the report information to better position their businesses for faster growth.”

Equipment Finance Industry Size, 2016–2027, Billions of Dollars (Nominal)

About the study
The Industry Horizon Report can be used in combination with other Foundation reports, including the quarterly Equipment Leasing & Finance U.S. Economic Outlook, the monthly Foundation-Keybridge U.S. Equipment & Software Investment Momentum Monitor, and the annual Industry Future Council report, to better understand the current and near-term economic conditions and other relevant trends facing the equipment finance industry.

How to access the study
The 2024 Equipment Leasing & Finance Industry Horizon Report is available for free download at https://www.leasefoundation.org/industry-resources/horizon-report/.

All Foundation studies are available for free download from the Foundation’s online library at http://store.leasefoundation.org/.

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Media Contact: Kelli Nienaber, knienaber@leasefoundation.org

Q4 Update to the 2024 Economic Outlook Forecasts 4.4% Expansion in Equipment and Software Investment, 2.7% GDP Growth

Washington, DC, October 23, 2024 –The U.S. economy remains on strong footing, fueled in part by continued healthy investment in equipment and software, according to the Q4 update to the 2024 Equipment Leasing & Finance U.S. Economic Outlook. Real equipment and software investment growth is projected to be 4.4% in 2024, with a modest near-term outlook for investment growth and the potential for improvement next year as interest rate cuts start to take effect in the economy. The report, which was prepared by Keybridge and released today by the Equipment Leasing & Finance Foundation, also forecasts real GDP growth of 2.7% this year, a slight uptick from the Foundation’s Q3 update to the 2024 Economic Outlook published in July.

The Foundation’s report is focused on the $1.16 trillion equipment leasing and finance industry and highlights key trends in equipment investment, placing them in the context of the broader U.S. economic climate.

Leigh Lytle, President of the Foundation, and President & CEO of the Equipment Leasing and Finance Association, said, “The Foundation’s Q4 Outlook continues to support a soft-landing scenario and provides optimism for 2025 investment activity. The U.S. economy has been impressively resilient but heightened political and economic uncertainty, as well as weather-related business interruptions, are likely to slow investment growth in Q4. We are optimistic that activity will remain strong in 2025, however, as Fed rate cuts start taking effect and election-related uncertainty abates. The Monthly Confidence Index for the Equipment Finance Industry agrees with Q4 Outlook findings, holding steady in October at its highest level since 2022.”

Highlights from the Q4 update to the 2024 Outlook include:

Equipment and software investment bounced back in Q2 after three consecutive weak quarters, expanding by a strong 7.0% (annualized). Aircraft investment was primarily responsible for the improvement, along with information processing equipment, while industrial equipment contracted modestly.
The U.S. economy experienced broad-based growth in the second quarter, expanding at a 3.0% annualized rate (up from 1.6% in Q1). Softer-than-anticipated job growth and rising unemployment over the summer raised questions about the long-term sustainability of the current economic expansion. However, layoffs remain low by historical standards, real wage growth is healthy, inflation is modestly elevated but largely contained, and the prospect for additional rate cuts later this year and next year should provide a boost to hiring and investment. The economy appears poised for growth in the new year.
The manufacturing sector continues to struggle. Both shipments and new orders of core capital goods are sluggish, industrial production is soft, the ISM Purchasing Managers Index for Manufacturing has contracted for 22 out of the last 23 months, and manufacturing employment has fallen by 50,000 workers in 2024 (including 34,000 in the last two months).
Small business owners have adopted a more cautious posture despite generally favorable business conditions. Recent shifts in the labor market, rising geopolitical tension, and the 2024 election have led to a rapid rise in uncertainty that may depress investment activity in the near term. At the same time, if inflation remains in check and the Fed gradually cuts rates as expected, activity should pick up again in early 2025.
The Fed is characterizing its decision to cut rates by 50 bps rather than 25 bps as a “recalibration” rather than an emergency reaction to a weakening labor market. The Fed maintains that rate cuts are not intrinsically linked to a looming recession, but rather that a controlled easing of monetary policy, if properly timed and calibrated, can help keep the economy on track.

Agriculture machinery investment growth will continue to weaken.
Construction machinery investment growth will continue to contract.
Materials handling equipment investment growth may improve modestly.
All other industrial equipment investment growth will remain muted, though recent movement is encouraging
Medical equipment investment growth may expand modestly, but momentum is soft.
Mining and oilfield machinery investment growth will remain weak, though recent movement is encouraging.
Aircraft investment growth should continue to improve.
Ships and boats investment growth appears to have bottomed out and should improve.
Railroad equipment investment growth should remain positive, though momentum is slowing.
Trucks investment growth will remain soft and may turn negative.
Computers investment growth should continue to expand at a robust pace.
Software investment growth will expand at a solid pace.

Download the full report at https://www.leasefoundation.org/industry-resources/u-s-economic-outlook/.

Download the Momentum Monitor at https://www.leasefoundation.org/industry-resources/momentum-monitor/.

All Foundation studies are available for free download from the Foundation’s online library at http://store.leasefoundation.org/.

JOIN THE CONVERSATION
X/Twitter: https://twitter.com/LeaseFoundation
LinkedIn: https://www.linkedin.com/company/10989281/
Vimeo: https://vimeo.com/elffchannel

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Media Contact: Kelli Nienaber, knienaber@leasefoundation.org