Oct 25 (Reuters) - Borrowings by U.S. companies for capital investment rose 12 percent in September from a year earlier, the Equipment Leasing and Finance Association (ELFA) said on Tuesday.
Companies signed up for $9.4 billion in new loans, leases and lines of credit last month, said the Washington-based trade group, which reports economic activity for the $1 trillion U.S. equipment finance industry.
The U.S. Federal Reserve’s decision to keep interest rates low has spurred businesses to spend more on equipment, ELFA Chief Executive Ralph Petta said in a statement.
However, total new borrowings in the first nine months of the year fell 4 percent, ELFA said.
In September, credit approvals fell to 76.6 percent of all applications submitted from 76.9 percent in August, ELFA said.
There is pent up demand for capital investment, but given the unpredictable domestic environment and the economic headwinds globally, the unevenness may last for several months, said Stan Walker, managing director of JPMorgan Equipment Finance.
ELFA’s leasing and finance index tracks the volume of commercial equipment financed in the United States. The index complements 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 lenders, including Bank of America Corp, BB&T Corp, CIT Group Inc and the financing affiliates or units of Caterpillar Inc , Deere & Co, Siemens AG and Volvo AB .
Separately, the Equipment Leasing & Finance Foundation, ELFA’s non-profit affiliate, said its confidence index rose to 56.0 for October from 53.8 for September.
The index is an indicator of the outlook for the equipment finance market, with a reading above 50 suggesting a positive outlook. (Reporting by Shashwat Awasthi in Bengaluru; Editing by Anil D’Silva)