(Reuters) - U.S. companies’ borrowing to spend on capital investments rose 4 percent in January from a year earlier, the Equipment Leasing and Finance Association (ELFA) said on Monday.
“2019 gets off to a strong start in the equipment finance industry... Credit quality is stable,” ELFA Chief Executive Officer Ralph Petta said in a statement.
Companies signed up for $7.2 billion in new loans, leases and lines of credit last month, up from $6.9 billion a year earlier. However, borrowing fell 43 percent from $12.7 billion in December.
“Business owners continue to expand their operations and acquire productive assets, even as interest rates edge up ever so slightly, with the Fed signaling a cautious wait-and-see posture for additional interest rate hikes this year,” Petta said.
Washington-based ELFA, a trade association that reports economic activity for the $1 trillion equipment finance sector, said credit approvals totaled 76.1 percent in January, down from 77.9 percent in December.
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.
The index is based on a survey of 25 members that include Bank of America Corp, BB&T Corp, CIT Group Inc and the financing affiliates or units of Caterpillar Inc, Deere & Co, Verizon Communications Inc, Siemens AG, Canon Inc and Volvo AB.
The Equipment Leasing & Finance Foundation, ELFA’s non-profit affiliate, said its confidence index for February is 56.7, up from 53.4 in January. A reading of above 50 indicates a positive outlook.
Reporting by Shravanth Vijayakumar in Bengaluru; Editing by Shinjini Ganguli