U.S. Business Equipment Borrowings Grow 9 Percent in December

U.S. companies borrowed 9 per cent more in December to finance equipment Industry body Equipment Leasing and Finance Association reported Tuesday that investments have increased by 4% compared to a previous year.

According to ELFA, the companies signed up last month for $12.9 billion in new loans and leases as well as lines of credit. This compares with $11.8 billion a previous year. Cumulative borrowings rose 6 percent since January 2022.

ELFA, which tracks economic activity for the $1 Trillion equipment finance sector reported that credit approvals were 76.6 percent in December, a decrease from 77.7 % in November.

“Not knowing yet the full impact of the Fed’s series of rapid rate increases on the economy, I believe many companies will start the year with more focus on credit quality and spreads versus origination volume,” said AP Equipment Financing’s president, Chris Lerma.

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

The index was compiled from a survey of 25 members including Bank of America Corp. as well as financing affiliates or units of Caterpillar Inc.., Dell Technologies Inc.. Siemens AG. Canon Inc..

The Equipment Leasing & Finance Foundation, ELFA’s non-profit affiliate, said its confidence index in January stood at 48.5, an increase from 45.9 in December. Positive business outlooks are indicated by a reading of 50 or more.