Oct 25 (Reuters) – U.S. companies borrowed 11 percent more in September from a year earlier, industry body the Equipment Leasing and Finance Association (ELFA) said on Tuesday, amid a slowing pace of growth. The situation raises fears about the sustainability of this growth.
The companies signed $10.2 billion in new loans, leases and lines of credit last month, compared with $9.2 billion a year earlier, according to ELFA. Borrowings rose nearly 6% from January.
“Despite continued supply chain challenges, inflationary pressures and rising interest rates, the industry and our financial companies continue to grow,” Star Hill Financial LLC CEO Hollis Bufferd said in a statement.
“The possibility of continued Fed rate hikes creates some uncertainty, but we are seeing increased demand for fixed-rate leases and loans to support our customers’ capital spending. Given the turmoil in the global economy, I am cautiously optimistic, ‘ added the buffer.
ELFA, which reported economic activity in the nearly $1 trillion equipment finance sector, said credit approvals totaled 77.3 percent, up from 75.2 percent in August.
The Washington-based agency’s Leasing and Financing Index measures the amount of commercial equipment financed in the United States.
The index is based on a survey of 25 members, including Bank of America (BAC.N) and the financing affiliates of Caterpillar Inc (CAT.N), Dell Technologies (DELL.N), Siemens AG (SIEGn.DE) or division), Canon AG and Volvo AB (VOLVb.ST).
The Equipment Leasing and Finance Foundation, ELFA’s nonprofit affiliate, said its confidence index stood at 45 percent in October, compared with 48.7 percent in September. A reading above 50 indicates a positive business outlook.
Reporting by Priyamvada C in Bengaluru; Editing by Krishna Chandra Eluri
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