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U.S. Equipment Borrowing Surges Over 5% in October, Highest in a Year

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  Published in Business and Finance on Monday, November 24th 2025 at 22:55 GMT by Reuters

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U.S. Business Equipment Borrowing Surges Over 5% in October – What the Numbers Mean for the Economy

In a recent release by the Business Equipment Leasing and Finance Association (BELA), U.S. firms drew on borrowing for equipment that increased by more than 5 percent in October, according to data from a spokesperson named Elfa. The spike represents the most robust growth in equipment financing since mid‑2023 and signals a tightening in capital allocation as companies seek to modernize and stay competitive in a fast‑moving market.

The Numbers at a Glance

The data reveal that businesses across the country are increasing the amount of capital they are willing to commit to equipment purchases and leases. While interest rates have been hovering near 10 percent for the past few months, the willingness to pay has increased, underscoring a confidence that the investments will generate returns that offset borrowing costs.

Elfa, the BEFA spokesperson, pointed out that the “5‑plus‑percent uptick in October is the highest we have seen in any single month in more than a year, and it comes amid a broader trend of firms aggressively upgrading their technology stack.” The data also show a steady climb in the average loan amount, indicating that firms are not only borrowing more, but borrowing more for larger, often more sophisticated, pieces of equipment.

What’s Driving the Surge?

1. Automation & Robotics – Manufacturing firms are leaning into automation to reduce labor costs and improve precision. Several companies have taken larger, multi‑million‑dollar equipment loans to install industrial robots, automated guided vehicles (AGVs), and high‑speed assembly lines.

2. Digital Transformation – Software‑centric firms and logistics providers are purchasing or leasing advanced machinery such as 3‑D printers, CNC machines, and AI‑powered analytics platforms. The move is seen as a way to embed digital capabilities into physical operations.

3. Renewable Energy & Sustainability – A growing segment of borrowing is earmarked for solar panel arrays, wind turbines, and battery storage systems. According to BEFA data, about 12 % of new equipment loans in October were earmarked for sustainability‑related upgrades.

4. Supply Chain Modernization – In light of the supply‑chain disruptions that persisted during the pandemic, firms are investing in warehouse automation and advanced inventory‑management machinery to reduce the risk of stockouts.

Contextualizing the Data

The BEFA article references the “BELA Annual Report 2024,” which paints a broader picture: equipment borrowing accounts for roughly 7.2 % of all small‑business loan activity in the United States. The report also notes that leasing remains the predominant financing method, a trend that has been consistent since 2018. This preference for leasing can be traced to the flexibility it offers, especially in an environment of volatile commodity prices and rapid technology change.

An article linked in the original release—highlighting a 6 percent rise in commercial real‑estate borrowing in September—provides further context. The synergy between real‑estate and equipment financing underscores that firms are simultaneously investing in both their physical and operational infrastructure. That alignment is particularly pronounced in the manufacturing sector, where expanded production capacity is needed alongside new machinery.

Elfa also referenced a 2025 forecast from BEFA’s “Economic Outlook” which projects a modest 3.2 percent growth in equipment borrowing over the next year. The forecast is conditioned on a continued rise in technology adoption and a gradual decline in the cost of borrowing as inflation eases.

Broader Economic Implications

The increase in equipment borrowing signals confidence among businesses, but it also has ripple effects on the broader economy:

• Supply Chain Resilience – As firms upgrade their machinery, supply chains can become more agile, potentially mitigating future disruptions.
• Employment Dynamics – While automation can reduce the need for certain labor categories, it can also generate demand for skilled technicians to install, operate, and maintain advanced equipment.
• Interest‑Rate Sensitivity – Despite high rates, firms are willing to pay; this resilience may put pressure on lenders to offer more favorable terms or new product offerings (e.g., revenue‑based financing).
• Innovation Momentum – The capital allocation shift towards high‑tech equipment signals a broader push for innovation, which could translate into higher productivity growth.

Looking Ahead

With the U.S. Federal Reserve signaling a cautious path toward lower interest rates later in 2025, businesses are likely to keep an eye on borrowing rates. The BEFA “Annual Report 2025” suggests that while borrowing volumes may grow, the average loan amount could plateau or even decline if firms become more conservative amid higher rates.

Elfa’s key takeaway: “The fact that companies are still stepping up their equipment purchases at this pace is a positive sign. It indicates that despite the macro‑economic uncertainties, firms feel that the returns on these investments will outweigh the cost of borrowing.”

Bottom Line

The 5 percent-plus uptick in October’s equipment borrowing underscores a market in transition. Firms are investing heavily in automation, digitalization, and sustainability, leveraging both leasing and outright purchase options. While the data come from a single month, the trend is consistent with broader economic signals—such as rising employment in tech‑heavy manufacturing and a willingness to adopt new technology—to suggest that the U.S. business landscape is becoming more capital‑intensive, more technology‑driven, and more resilient to supply‑chain shocks. For investors, policymakers, and economists, the data provide a useful barometer of business confidence and an early indicator of where the next wave of productivity gains may arise.