Report: Equipment Finance Sector Poised for Growth Despite Economic Uncertainty

Confidence in the equipment finance market is on the rise, and the Equipment Leasing and Finance Association says trends in reshoring, EaaS and AI will set the stage for continued growth and innovation in 2025.

The organization, which represents the nearly $1.3 trillion equipment finance sector, recently released its top six equipment acquisition predictions for 2025. Contractors and dealers can use these trends to better understand the market environment as they make plans to buy and sell equipment. 

“As we look toward 2025, the equipment finance industry continues to play a pivotal role in driving innovation, sustainability, and economic growth,” said ELFA President and CEO Leigh Lytle. “From advancing clean energy investments to leveraging AI and digital transformation, our predictions reflect how the industry is evolving to meet new demands and seize emerging opportunities.” 

After distilling recent research, data and member input, ELFA anticipates the following equipment leasing and financing trends for the year: 

1. Focus on Reshoring and Domestic Manufacturing: As supply-chain resilience remains a priority, equipment finance will play a key role in enabling the reshoring of manufacturing and investment in advanced production technologies. 
2. Interest Rate Sensitivity Drives Innovation: In a high-interest-rate environment, companies will explore flexible financing options like leasing and pay-per-use models to preserve capital and adapt to economic fluctuations. 
3. Expansion of Equipment-as-a-Service (EaaS): The rise of subscription-based and usage-driven financing models will continue, offering businesses more flexibility and alignment with operational needs. 
4. AI and Data Analytics Redefine Decision-Making: Equipment finance companies will increasingly adopt artificial intelligence and predictive analytics to enhance underwriting processes, assess risks and optimize customer experiences. 
5. Sustainable Financing Gains Momentum: The growing focus on sustainability is driving increased demand for financing solutions that support energy-efficient equipment, renewable energy projects and advancements in transportation technologies. 
6. Cybersecurity Becomes a Top Priority: As connected and IoT-enabled equipment becomes more prevalent, equipment finance providers will emphasize cybersecurity measures to protect customer data and assets. 

Despite an uncertain economic environment, ELFA says its predictions underscore “a wealth of opportunities for growth and innovation within the equipment finance sector.”

One ELFA survey respondent, William C. Perry III, EVP & group head, Regions Equipment Finance Corporation, commented on the association’s recent confidence index, saying, “Encouraging data points clearly demonstrate the resiliency and critical role of equipment finance to the U.S. economy. As you consider further anticipated rate cut(s), capacity reshoring and the potential for 100% bonus depreciation being reinstated, we expect companies to increase investments in new technology, resources, and production equipment. This should equate to increased demand for structured leasing and equipment finance products as companies look to maximize associated tax benefits. Having performed well over the past 24 months, the equipment finance sector is justly poised for growth as we head into 2025 and beyond.”