Business Investment Defies Shutdown, Signals Economic Resilience

WASHINGTON, D.C. – November 25, 2025 – While a historic federal government shutdown paralyzed Washington and rattled markets this fall, a critical segment of the U.S. economy was quietly sending a powerful message of resilience. New data reveals that American businesses continued to invest heavily in new equipment, brushing off the political chaos and suggesting a surprisingly robust foundation for growth heading into 2026.

According to the latest CapEx Finance Index (CFI) released by the Equipment Leasing & Finance Association (ELFA), demand for equipment financing held near a 2025 high in October. The industry is now on pace for over $117 billion in new business volume this year, positioning 2025 as the second-strongest year for capital investment since the survey began in 2006. This sustained activity offers a crucial counter-narrative to headlines dominated by economic uncertainty.

An Island of Stability in a Sea of Uncertainty

The strength detailed in the ELFA report is particularly striking given its backdrop. The 43-day government shutdown, the longest in U.S. history, began on October 1st and directly impacted the economy by furloughing nearly a million federal workers and stalling countless government functions. The Congressional Budget Office had projected a significant drag on fourth-quarter GDP, with economists estimating the weekly cost to the economy at around $7 billion.

This political turmoil also created a data vacuum. Key federal agencies like the Bureau of Labor Statistics were unable to release their full economic reports, leaving analysts and policymakers to navigate with limited visibility. In this environment, independent, real-time indicators like the CFI have become indispensable.

While some manufacturing surveys in October presented a mixed or even contractionary picture, the equipment finance sector—a proxy for real-world business investment—told a different story. New business volume clocked in at $10.5 billion, matching the previous month's high.

“Equipment demand was unfazed by the government shutdown in October. The latest data showed businesses continue to invest despite a volatile and unpredictable fall,” said Leigh Lytle, President and CEO at ELFA. “At the current pace, 2025 will end up as the second-best year for equipment demand in the history of our CFI survey... setting us up for a strong start to 2026.”

The Credit Engine: Banks Step on the Gas

The resilience in business investment is not merely a story of demand; it is fundamentally a story about the availability of capital. The ELFA data shows that the financial spigots have remained wide open, with the overall credit approval rate hovering near a decade high at 79.0%.

Digging deeper into the numbers, however, reveals a dramatic competitive shift within the $1.3 trillion equipment finance industry. The engine of this year's growth has been the banking sector. Year-to-date, new business volume at banks has surged by 6.5% compared to the same period in 2024. This growth is amplified by a record-high credit approval rate of 82.1% at banks in October, indicating an aggressive and successful push to capture market share.

This stands in stark contrast to the performance of other lender types. Captive finance companies—the lending arms of equipment manufacturers—have seen their volumes plummet by 15.6% year-to-date. Independent lenders have also seen a modest contraction of 2.4%. While the sharp decline for captives is partly due to a difficult comparison against a record-breaking 2024, the trend is unmistakable: banks are dominating the field, providing the liquidity that is enabling businesses to move forward with capital expenditures.

Gauging the Health of Business Debt

With credit flowing so freely, questions about the quality of that debt naturally arise. The ELFA report presents a nuanced picture: while delinquencies have ticked up, actual losses are falling. The overall delinquency rate rose to 2.2% in October, but it remains within the narrow band seen over the past year. More importantly, the net loss rate declined for the second straight month to 0.44%, its lowest point since May.

This divergence between rising late payments and falling write-offs suggests that while some businesses may be feeling the strain, lenders are effectively managing risk and recovering value. According to one financial analyst specializing in structured finance, this dynamic reflects a "return to normalcy" rather than a sign of impending distress. The unusually low loss rates seen in the immediate post-pandemic years were an anomaly, propped up by stimulus funds and soaring used-equipment values.

"What we're seeing now is a market that's normalizing after a period of extreme conditions," the analyst noted. "The current delinquency and loss figures are well below the crisis levels seen during major recessions, which supports the idea that the industry's financial health is fundamentally sound."

Where Investment is Flowing: Healthcare and Small Business Lead

So, which sectors are driving this demand? While the ELFA report provides a top-level view, combining its findings with other economic data points to key areas of strength. The healthcare sector, a consistent engine of job growth throughout 2025, is a prime candidate. As hospitals, clinics, and labs continue to expand and upgrade, the need for financing advanced diagnostic imaging machines, robotic surgical systems, and sophisticated data management infrastructure remains acute.

The transportation equipment manufacturing sector has also shown resilience, signaling ongoing investment in logistics and supply chain capacity. But perhaps the most telling indicator is the surge in "small ticket" financing—deals for smaller equipment often made by small-to-medium-sized businesses. This category saw its largest monthly increase since July 2024, growing by $3.7 billion.

This broad-based activity suggests that investment is not just the domain of large corporations. It signals that smaller enterprises, from local construction firms to private medical practices, are confident enough in future demand to acquire the tools they need to grow. This undercurrent of widespread capital expenditure, powered by accessible bank financing, paints a picture of an economy with a solid, if underappreciated, foundation for future innovation and productivity.

The sustained confidence among industry executives, who have registered high levels of optimism for six consecutive months, reinforces this forward-looking perspective. Despite the noise from Washington and Wall Street, the core activity of building and equipping the American economy continues at a near-record pace.