November 20, 2018 / 11:35 PM / 23 days ago

U.S. business borrowing for equipment rises 6 percent in October: ELFA

(Reuters) - U.S. companies’ borrowing to spend on capital investment rose 6 percent in October from a year earlier, a trade group representing capital equipment lenders said on Tuesday.

One hundred dollar notes are seen in this photo illustration at a bank in Seoul January 9, 2013. REUTERS/Lee Jae-Won

The companies signed up for $8.9 billion in new loans, leases and lines of credit last month, up from $8.4 billion a year earlier, the Equipment Leasing and Finance Association (ELFA) said.

The increase in volume was helped by an expanding U.S. economy and lower corporate taxes, which continued to support capital spending by businesses.

“October new business generation shows no apparent signs of slowing down, despite slight—and steady—increases in long-term interest rates and reports of tariff concerns,” ELFA Chief Executive Ralph Petta said in a statement.

“With another round of interest rate hikes scheduled before year-end, we will be monitoring closely any changes in business conditions.”

Washington-based ELFA, which reports economic activity for the $1 trillion equipment finance sector, said credit approvals were 76.5 percent in October, up from 75.7 percent in September.

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), Siemens AG (SIEGn.DE), Canon Inc (7751.T) and Volvo AB (VOLVb.ST).

The Equipment Leasing and Finance Foundation, ELFA’s non-profit affiliate, said its confidence index for November was 58.5, down from the October index of 63.2.

A reading of above 50 indicates a positive outlook.

Reporting by Ankit Ajmera in Bengaluru; Editing by Maju Samuel

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