July 25, 2017 / 7:00 PM / 2 years ago

U.S. business borrowing for equipment falls in June - ELFA

July 25 (Reuters) - U.S. companies’ borrowing to spend on capital investment fell in June, the Equipment Leasing and Finance Association (ELFA) said.

Companies signed up for $9.8 billion in new loans, leases and lines of credit last month, down 2 percent from a year earlier. However, their borrowing rose 27 percent from May.

“Industry volume strengthened in the second quarter, building on strong capex investment in the prior quarter,” ELFA Chief Executive Ralph Petta said in a statement.

“The wild card is whether markets will continue to grow despite gridlock in Washington, D.C., and other headwinds or eventually pull back as a result.”

Washington-based ELFA, a trade association that reports economic activity for the $1 trillion equipment finance sector, said credit approvals totaled 75.9 percent in June, down from 77 percent in 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 Bank of America Corp, BB&T Corp, CIT Group Inc and the financing affiliates or subsidiaries 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 was 63.5 for July, flat from June. A reading of above 50 indicates a positive outlook. (Reporting by Radhika Rukmangadhan in Bengaluru; Editing by Anil D’Silva)

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