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

by Mike Robinson

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© Reuters. FILE PHOTO : A view of New York Stock Exchange (NYSE), in lower Manhattan at the time of COVID-19, an outbreak of coronavirus in New York City (USA), 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.

Last month’s borrowings by American companies grew to $8.5 billion, up from $7.4 billion last year. Borrowings decreased 14% compared to the prior month.

Ralph Petta, Chief Executive Officer of ELFA stated that August data showed some weakness in equipment demand due to a combination of continued supply chain disruptions, summer doldrums and lingering pandemic related woes.

Business optimism which had reached its peak earlier this summer has also waned.

ELFA (Washington-based economic data provider) reported that credit approvals for equipment financing totaled 76.3% in July, down from 76.5% in July.

The ELFA financing and leasing index is a measure of the US commercial equipment financing.

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

The Equipment Leasing and Finance Foundation is ELFA’s non-profit affiliate. In September it reported a confidence index of 60.5. This was down from 66.6 in august.

Positive business prospects are indicated by a reading of 50 or more.

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