U.S. companies borrowed 9 percent more in December to finance equipment investments compared with a year earlier, industry body Equipment Leasing and Finance Association (ELFA) said on Tuesday.
The companies signed up for $12.9 billion in new loans, leases, and lines of credit last month, compared with $11.8 billion a year earlier, according to ELFA. Cumulative borrowings were up 6 percent from January 2022.
ELFA, which reports economic activity for the $1 trillion equipment finance sector, said credit approvals totaled 76.6 percent in December, down from 77.7 percent in November.
"Not knowing yet the full impact of the Fed's series of rapid rate increases on the economy, I believe many companies will start the year with more focus on credit quality and spreads versus origination volume," said AP Equipment Financing's president, Chris Lerma.
Washington-based ELFA's leasing and finance index measures the volume of commercial equipment financed in the United States.
The index is based on a survey of 25 members, including Bank of America Corp., and financing affiliates or units of Caterpillar Inc., Dell Technologies Inc., Siemens AG, Canon Inc., and Volvo AB.
The Equipment Leasing & Finance Foundation, ELFA's non-profit affiliate, said its confidence index in January stood at 48.5, an increase from 45.9 in December. A reading above 50 indicates a positive business outlook.