May 22, 2019 / 7:00 PM / 4 months ago

U.S. business borrowing for equipment rises 11% in April- ELFA

May 22 (Reuters) - U.S. companies' borrowing to spend on capital investments rose 11% in April from a year earlier, the Equipment Leasing and Finance Association (ELFA) said on Wednesday.

Companies signed up for $8.8 billion in new loans, leases and lines of credit last month, up from $7.9 billion a year earlier.

Borrowings jumped 7% in April from the previous month.

"Second quarter new business volume starts off strongly. Continued low interest rates, a strong labor market and solid economic fundamentals all contribute to healthy demand by U.S. businesses-both large and small-for financed assets to run their business operations," ELFA Chief Executive Officer and President Ralph Petta said.

"However, going into May with the looming trade war and rippling effects into various sectors in the economy, we expect that companies will defer asset acquisitions until stability returns," Petta said, adding the overall economic conditions and low interest rates should provide some cushion.

Washington-based ELFA, which reports economic activity for the $1 trillion equipment finance sector, said credit approvals totaled 76.8%, up from 75.3% in March.

ELFA's leasing and finance index measures the volume of commercial equipment financed in the United States. It is designed to complement the U.S. Commerce Department's durable goods orders report, which it typically precedes by a few days.

The index is based on a survey of 25 members that include Bank of America Corp, BB&T Corp, CIT Group Inc and the financing affiliates or units of Caterpillar Inc , Deere & Co, Verizon Communications Inc, Siemens AG, Canon Inc and Volvo AB .

The Equipment Leasing & Finance Foundation, ELFA's non-profit affiliate, said its monthly confidence index in May is 59.2, up from 58.3 in April. A reading of above 50 indicates a positive outlook. (Reporting by Divya R; Editing by Shailesh Kuber)

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