US business borrowing for equipment falls 1% in June – ELFA

July 25 (Reuters) – US companies borrowed 1% less in June to finance their investments in equipment compared with a year earlier, the Equipment Leasing and Finance Association (ELFA) said on Monday.

The companies signed up for $10.3 billion in new loans, leases and lines of credit last month, compared with $10.4 billion a year earlier. However, borrowings rose 6% from January.

“Inflation continues to provide a headwind in an otherwise benign economy. The Fed has signaled its resolve to meet these inflationary pressures by steadily increasing short-term interest rates, without throwing cold water on our post-pandemic economic recovery,” ELFA Chief Executive Ralph Petta said in a statement.

ELFA, which reports economic activity for the nearly $1 trillion equipment finance sector, said credit approvals totaled 78.1%, up from 76.8% in May.

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 (BAC.N), and financing affiliates or units of Caterpillar Inc (CAT.N), Dell Technologies Inc (DELL.N), Siemens AG (SIEGn. DE), Canon Inc and Volvo AB (VOLVb.ST).

The Equipment Leasing & Finance Foundation, ELFA’s non-profit affiliate, said its confidence index in July is 46.1%, a decrease from 50.9% in June. A reading above 50 indicates a positive business outlook.

Reporting by Kannaki Deka in Bengaluru; Editing by Devika Syamnath

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