US Business Equipment Borrowings Decline 10% Year-over-Year in August, Reports ELFA

U.S. companies experienced a 10% decline in borrowing for equipment investments in August compared to the same month last year, according to a report from the Equipment Leasing and Finance Association (ELFA).

The total amount of new loans, leases, and lines of credit secured by companies fell 17% from $11.1 billion in July.

Leigh Lytle, President and CEO of ELFA, noted that the Federal Reserve’s decision to start reducing interest rates should encourage demand for equipment, though some businesses may choose to wait for further rate decreases before committing to investments.

The Washington-based trade group, which tracks economic activity within the equipment finance sector valued at over $1 trillion, reported that credit approval rates for U.S. companies remained steady at 76% in August, unchanged from July.

Additionally, the Equipment Leasing & Finance Foundation, an ELFA affiliate, revealed that its confidence index for September reached 61.9, the highest level in more than two years, up from 58.4 in August. A score above 50 indicates confidence in the business outlook.

The ELFA’s leasing and finance index is derived from a survey of 25 members, including prominent organizations in the finance and equipment sectors.