August 22, 2018 / 7:04 PM / 8 months ago

U.S. business borrowing for equipment rises 4 percent in July: ELFA

(Reuters) - U.S. companies’ borrowing to spend on capital investments rose 4 percent in July from a year earlier, a trade group representing capital equipment lenders said on Wednesday.

The Equipment Leasing and Finance Association (ELFA) said the companies signed up for $8.2 billion in new loans, leases and lines of credit last month, up from $7.9 billion a year earlier.

“End-of-summer volume remains steady in the face of slowly rising interest rates and trade and tariff concerns in some pockets of the economy,” ELFA Chief Executive Officer Ralph Petta said in a statement.

“As we enter the late summer months, industry observers will be keeping a close eye on changes in credit markets as well as a flattening of the yield curve in the broader bond market.”

Washington-based ELFA, which reports economic activity for the $1 trillion equipment finance sector, said credit approvals totaled 76.2 percent in July, up from 75.8 percent in June.

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 (BAC.N), BB&T Corp (BBT.N), CIT Group Inc (CIT.N) and the financing affiliates or units of Caterpillar Inc (CAT.N), Deere & Co (DE.N), Verizon Communications Inc (VZ.N), Siemens AG (SIEGn.DE), Canon Inc (7751.T) and Volvo AB (VOLVb.ST).

The Equipment Leasing & Finance Foundation, ELFA’s non-profit affiliate, said its confidence index for August is 60.7, down from 62.8 in July. A reading of above 50 indicates a positive outlook.

Reporting by Sanjana Shivdas in Bengaluru; Editing by Maju Samuel

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