U.S. business borrowing for equipment recovers in July, says trade association

Aug 24 (Reuters) - U.S. companies’ borrowings in July fell 3% from a year earlier, recovering from double-digit declines in the two months prior and signaling a comeback from the impact of the pandemic, the Equipment Leasing and Finance Association (ELFA) said on Monday.

ELFA’s leasing and finance index measures the volume of commercial equipment financed in the United States.

The index is based on a survey of 25 members, including Bank of America Corp, CIT Group Inc and the financing affiliates or units of Caterpillar Inc, Dell Technologies Inc, Siemens AG, Canon Inc and Volvo AB.

The trade association said U.S. companies signed up for $9.1 billion in new loans, leases and lines of credit last month, down from $9.4 billion a year earlier. That was an improvement from a 10% drop in June to $8.9 billion and a 26% plunge in May to $6.7 billion.

“In the face of rising COVID-19 cases in some areas of the country, equipment demand remains solid in certain market sectors and weak in others,” ELFA Chief Executive Officer Ralph Petta said.

“The hope is that, as we move into the third quarter, economic growth turns a corner and Americans return to work.”

Washington-based ELFA, which reports economic activity for the nearly $1-trillion equipment finance sector, said credit approvals totaled 72.9% in July, up from 71.5% in June.

The Equipment Leasing and Finance Foundation, ELFA’s non-profit affiliate, reported a monthly confidence index of 48.4% in August, an increase from 45.3% in July. (Reporting by Ankit Ajmera in Bengaluru; Editing by Ramakrishnan M.)