U.S. business equipment borrowings grew 11% in September - ELFA
Reuters
Published Oct 25, 2022 03:09PM ET
(Reuters) - U.S. companies borrowed 11% more in September to finance their equipment investments compared with a year earlier, industry body Equipment Leasing and Finance Association (ELFA) said on Tuesday, while raising doubts over the sustainability of this growth amid slowdown fears.
The companies signed up for $10.2 billion in new loans, leases and lines of credit last month, compared with $9.2 billion a year earlier, according to ELFA. Borrowings were up nearly 6% from January.
"Despite continued challenges in the supply chain, inflationary pressures and rising interest rates, the industry and our finance company continue to grow," Star Hill Financial LLC Chief Executive Hollis Bufferd said in a statement.
"The probability of continued Federal Reserve interest rate increases on the horizon creates some uncertainty, but we are seeing increased demand for fixed rate leases and loans to support our clients' capital expenditures. With an eye on global economic disruptions, I am cautiously optimistic," added Bufferd.
ELFA, which reports economic activity for the nearly $1-trillion equipment finance sector, said credit approvals totaled 77.3%, up from 75.2% in August.
The Washington-based body'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 (NYSE:BAC) and financing affiliates or units of Caterpillar Inc (NYSE:CAT), Dell Technologies (NYSE:DELL) Inc, Siemens AG (OTC:SIEGY), Canon Inc and Volvo AB (OTC:VLVLY).
The Equipment Leasing & Finance Foundation, ELFA's non-profit affiliate, said its confidence index in October stood at 45%, compared with 48.7% in September. A reading above 50 indicates a positive business outlook.
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Written By: Reuters
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