April 24, 2018 / 7:01 PM / a year ago

U.S. business borrowing for equipment rises 2 pct in March - ELFA

April 24 (Reuters) - Borrowing by U.S. businesses for capital goods rose 2 percent in March from a year earlier, the Equipment Leasing and Finance Association (ELFA), a Washington-based trade body, said.

Companies signed up for $9.1 billion in new loans, leases and lines of credit last month, up from $8.9 billion a year earlier. Borrowing rose 18 percent from February.

“Tempering this trend, which reflects sound fundamentals in the overall economy and high business confidence, is the reality that charge-offs and delinquencies are also inching forward, ever so slightly,” ELFA Chief Executive Ralph Petta said in a statement.

Michael Romanowski, president of Farm Credit Leasing Services Corp, said customers continue to analyze the impact of tax reform, and in some cases, decided to delay investment or pay cash for capital expenditures.

“As the year progresses, we expect many customers to increase lease financing as it continues to be an attractive option for the assets that we lease,” Romanowski said.

ELFA, which reports economic activity for the $1 trillion equipment finance sector, said credit approvals totaled 75.2 percent in March, up from 74.2 percent in February.

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 units 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 fell to 68.3 in April from 72.2 in March. A reading of above 50 indicates a positive outlook. (Reporting by Sanjana Shivdas in Bengaluru; Editing by Arun Koyyur)

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