US business borrowing for equipment falls in December: ELFA
Borrowing by US companies to spend on capital investment declined 5 percent in December, trade association Equipment Leasing and Finance Association (ELFA) said.
Companies signed up for $12.5 billion in new loans, leases and lines of credit last month, less than a year earlier, but more than double from November, ELFA said.
Cumulative new business volume inched up 0.4 percent for 2015, relatively flat with 2014, ELFA said. “Now that the Fed has taken a first step toward higher long-term rates and with rock-bottom low oil prices giving way to sluggish fourth quarter growth in the US economy, it will be interesting to see how the equipment finance sector responds in early 2016 and throughout the winter months,” ELFA Chief Executive Ralph Petta said in a statement.
Credit approvals totaled 80.2 percent in December, up from 79.0 percent in November, said ELFA, a Washington-based trade association that reports economic activity for the $1 trillion equipment finance sector.
ELFA’s leasing and finance index measures the volume of commercial equipment financed in the United States. It is designed to complement the US Commerce Department’s durable goods orders report, which it precedes by a few days.
The 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 and Volvo AB.
The Equipment Leasing & Finance Foundation, ELFA’s non-profit affiliate, said its confidence index is 54.0 for January, down from December’s index of 60.2. A reading of above 50 indicates a positive outlook.