January 25, 2017 / 8:00 PM / 3 years ago

U.S. business borrowing for equipment falls 3 pct in Dec - ELFA

Jan 25 (Reuters) - U.S. companies’ borrowing to spend on capital investment fell 3 percent in December, compared with a year earlier, the Equipment Leasing and Finance Association (ELFA) said.

Companies signed up for $12.1 billion in new loans, leases and lines of credit last month, down 3 percent from a year earlier.

However, that was nearly double the $6.4 billion companies borrowed in November, in a typical end-of-year spike.

“With a seemingly business-friendly Trump Administration assuming the reins of power in Washington, business owners share a cautious optimism as they look to policies that hopefully will continue growing the U.S. economy ... ,” ELFA Chief Executive Ralph Petta said in a statement.

Credit approvals for all applications submitted in December was 77.4 percent, up from 76 percent in November, said ELFA, a Washington-based trade group that reports economic activity for the $1 trillion equipment financing sector.

“Credit market metrics remain in acceptable ranges,” Petta said.

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 rose to 73.4 in January from 67.5 in December.

A reading of above 50 indicates a positive outlook. (Reporting by Radhika Rukmangadhan in Bengaluru; Editing by Savio D’Souza)

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