U.S. Companies Borrow Less for Equipment Investments

(Reuters) – U.S. companies borrowed 10% less to finance equipment investments in August compared to the previous year, according to the Equipment Leasing and Finance Association (ELFA) released on Tuesday.

New loans, leases, and lines of credit signed in August also fell 17% from $11.1 billion the month before.

"The Fed’s decision to begin lowering interest rates will support demand for equipment, even if some businesses wait for rates to fall before investing," said ELFA President and CEO Leigh Lytle.

The Washington-based trade association, which reports economic activity for the over $1 trillion equipment finance sector, noted that credit approvals for U.S. companies in August remained unchanged at 76% from July.

ELFA's non-profit affiliate, the Equipment Leasing & Finance Foundation, reported its confidence index for September rose to 61.9, the highest in over two years, up from 58.4 in August.

A reading above 50 indicates a positive business outlook.

The ELFA's leasing and finance index is derived from a 25-member survey which includes Bank of America, financing units of Caterpillar (NYSE:CAT), Dell Technologies (NYSE:DELL), Siemens AG (OTC:SIEGY), Canon Inc., and Volvo AB (OTC:VLVLY).