U.S. business borrowing for equipment up 12 percent in August: ELFA
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People look at Deere equipment as they attend National Farm Machinery show in Louisville, Kentucky, February 11, 2016. REUTERS/Meredith Davis
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(Reuters) - Borrowings by U.S. companies for capital investment rose 12 percent in August compared with a year earlier, the Equipment Leasing and Finance Association (ELFA) said.
Companies signed up for $7.7 billion in new loans, leases and lines of credit last month, the Washington-based trade group said on Friday.
Still, total new borrowings in the first eight months of 2016 were down 6 percent compared with the same period a year earlier, said ELFA, which reports economic activity for the $1 trillion U.S. equipment finance industry.
"Taking together the (U.S. Federal Reserve's) September decision to stay put on interest rates and the approaching presidential election, the sector continues to give no clear indication about where it's headed," ELFA Chief Executive Ralph Petta said in a statement.
In August, credit approvals rose to 76.9 percent of all applications submitted from 75.9 percent in July, ELFA 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 precedes by a few days.
The index is based on a survey of 25 lenders that include 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 fell to 53.8 for September from 54.8 for August.
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 Savio D'Souza)
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