According to the Equipment Leasing and Finance Association (ELFA), American companies borrowed 8% less in October to finance equipment investments compared to a year ago. Despite some businesses feeling the impact of high interest rates, the industry has seen growth year-to-date. ELFA reports on economic activity for the nearly $1 trillion equipment financing sector and surveys banks like Bank of America and affiliates of equipment manufacturers for financing.

Year-to-date, cumulative new business volume is up 0.7% compared to 2022. ELFA CEO Ralph Petta said, “Despite a number of good indicators in the U.S. economy, participants are reporting a slight increase in both losses and delays.” Petta also added: “This softness in credit quality points to the challenges some businesses face as they operate in a higher interest rate environment, constrained in some sectors at least by reports of bank loan withdrawals.”

The trends are consistent with the economic environment and market turmoil resulting from quantitative tightening, inflation, employment and supply chain disruptions, according to Dennis Bolton, head of equipment finance for North America at Gordon Brothers. US companies signed new loans, leases and credit lines worth $10.4 billion in October, compared to $9.7 billion a month ago. Loan approvals also improved month-on-month, reaching 76% in October, up from 73.6% in September.

ELFA’s nonprofit subsidiary, the Equipment Leasing and Finance Foundation, said its confidence index stood at 42.8 in November, up from 40.1 in October

By Editor

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