US business borrowing for equipment rises 15 pct in June - ELFA
July 23 (Reuters) - U.S. companies borrowed more in June to invest in new equipment ranging from computer systems to aircraft, the Equipment Leasing and Finance Association (ELFA) said on Tuesday.
Companies signed up for $8.6 billion in new loans, leases and lines of credit last month, up 15 percent on a month-on-month basis.
The borrowing rose 8 percent from a year earlier.
"Businesses continue to increase spending on capital equipment as evidenced by U.S. government statistics showing three consecutive months' increase in durable goods orders by American firms," ELFA President and Chief Executive William Sutton said in a statement.
Washington-based ELFA, a trade association that reports economic activity for the $725 billion equipment finance sector, said credit approvals totaled 78.5 percent in June, nearly flat from May.
ELFA's leasing and finance index measures the volume of commercial equipment financed in the United States. It is designed to complement the U.S. Commerce Department's durable goods orders report, which it typically precedes by a few days.
ELFA's index is based on a survey of 25 members that include CIT Group Inc, Bank of America Corp, BB&T Corp and the financing affiliates or subsidiaries of Caterpillar Inc, Deere & Co, Dell Inc, Verizon Communications Inc, Siemens AG, Canon Inc and Volvo AB.
ELFA said it expects the positive trend to continue.
"It remains to be seen whether or not the financing volume holds up in the summer months. But, we anticipate that the second half of the year would be reasonably strong as well," said Ralph Petta, chief operating officer of ELFA.
The Equipment Leasing & Finance Foundation, ELFA's non-profit affiliate, said on Monday its July confidence index rose to 59.4 from 57.3 in June, reflecting industry participants' increasing optimism despite continued moderate growth of business investment in equipment.
A reading of above 50 indicates a positive outlook.
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