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U.S. business borrowing for equipment rises 21% in August – ELFA

U.S. business borrowing for equipment rises 21% in August - ELFA
© Reuters. FILE PHOTO: The New York Stock Exchange (NYSE) is seen in the financial district of lower Manhattan during the outbreak of the coronavirus disease (COVID-19) in New York City, U.S., April 26, 2020. REUTERS/Jeenah Moon

(Reuters) – Borrowings by U.S. companies for capital investments rose 21% in August from a year earlier, the Equipment Leasing and Finance Association (ELFA) said on Thursday.

The companies signed up for $8.5 billion in new loans, leases and lines of credit last month, up from $7 billion a year earlier. However, borrowings fell 14% from the previous month.

“August data show some softness in equipment demand resulting from a mix of summer doldrums, continued supply chain disruptions and lingering pandemic-related woes,” ELFA Chief Executive Officer Ralph Petta said in a statement.

“Business optimism, which peaked earlier in the summer, also has waned somewhat.”

Washington-based ELFA, which reports economic activity for the nearly $1-trillion equipment finance sector, said credit approvals totaled 76.3%, down from 76.5% in July.

ELFA’s leasing and finance index measures the volume of commercial equipment financed in the United States.

The index is based on a survey of 25 members, including Bank of America Corp (NYSE:BAC), CIT Group (NYSE:CIT) Inc and the financing affiliates or units of Caterpillar Inc (NYSE:CAT), Dell Technologies (NYSE:DELL) Inc, Siemens AG (OTC:SIEGY), Canon Inc and Volvo AB (OTC:VLVLY).

The Equipment Leasing and Finance Foundation, ELFA’s non-profit affiliate, reported a monthly confidence index of 60.5 in September, down from 66.6 in August.

A reading above 50 indicates a positive business outlook.

Source: Investing.com

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