American companies borrowed 11% more in May than a year ago to finance equipment investments, according to the Equipment Leasing and Finance Association (ELFA). Despite this increase, the amount of new loans, leasing and credit lines signed in May was 7% less compared to the previous month. ELFA President and CEO Leigh Little suggested that April’s drop in volume could be due to some businesses delaying equipment purchases until interest rates come down.
The value of the equipment finance sector is estimated to be over $1 trillion, with loan approval for US companies remaining at 75%, unchanged from April. The Equipment Leasing and Finance Foundation, a nonprofit affiliate of ELFA, reported a confidence index for June of 50.2, slightly down from May’s 50.7. A reading above 50 on the index indicates a positive business outlook.
The ELFA Leasing and Finance Index is derived from a 25-member survey that includes financial entities such as Bank of America and financial units of companies such as Caterpillar, Dell Technologies, Siemens AG, Canon Inc and Volvo AB. This information was reported by Abhinav Parmar in Bengaluru with editing by Tasim Zahid.