March 23, 2016 / 1:36 PM / 3 years ago

U.S. business borrowing for equipment falls in February: ELFA

Four thousand U.S. dollars are counted out by a banker counting currency at a bank in Westminster, Colorado November 3, 2009. REUTERS/Rick Wilking

(Reuters) - Borrowing by U.S. companies to spend on capital investment declined 2 percent in February, trade association Equipment Leasing and Finance Association (ELFA) said.

Companies signed up for $6.1 billion in new loans, leases and lines of credit last month, down from a year earlier but up 2 percent from January, ELFA said.

Cumulative new business volume decreased 7 percent compared with 2015, ELFA said.

“While February origination volume is virtually flat when compared to January and the year-earlier period, credit quality shows signs of deterioration, with delinquencies and charge-offs inching upward over the same time intervals,” ELFA Chief Executive Ralph Petta said in a statement.

Credit approvals totaled 79.2 percent in February, up from 78.0 percent in January, said ELFA, a Washington-based trade association that reports economic activity for the $1 trillion equipment finance sector.

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 precedes by a few days.

The 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) and Volvo AB (VOLVb.ST).

The Equipment Leasing & Finance Foundation, ELFA’s non-profit affiliate, said its confidence index is 51.6 for March, up from February’s index of 48.3.

A reading of above 50 indicates a positive outlook.

Reporting by Arunima Banerjee in Bengaluru; Editing by Anupama Dwivedi

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