(Reuters) - U.S. businesses borrowing to spend on capital goods was little changed in April from a year earlier, the Equipment Leasing and Finance Association (ELFA) said.
Companies signed up for $7.9 billion in new loans, leases and lines of credit last month. Borrowing fell 13 percent from March.
“Effects of new tax legislation signed into law late last year ... are serving to buoy business confidence and contribute to healthy capex levels. Delinquencies spiked during the period and, should a trend in credit quality emerge, bears watching,” ELFA Chief Executive Ralph Petta said in a statement.
The Washington-based trade body, which reports economic activity for the $1 trillion equipment finance sector, said credit approvals totaled 76.2 percent in April, up from 75.2 percent in March.
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 Bank of America Corp (BAC.N), BB&T Corp (BBT.N), CIT Group Inc (CIT.N) and the financing affiliates or units of Caterpillar Inc (CAT.N), Deere & Co (DE.N), Verizon Communications Inc (VZ.N), Siemens AG (SIEGn.DE), Canon Inc (7751.T) and Volvo AB (VOLVb.ST).
The Equipment Leasing & Finance Foundation, ELFA’s non-profit affiliate, said its confidence index fell to 64.6 in May from 68.3 in April.
A reading of above 50 indicates a positive outlook.
Reporting by Sanjana Shivdas in Bengaluru