The skyline is seen in Manhattan, New York City, U.S., August 21, 2021. REUTERS/Andrew Kelly
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Sept 23 (Reuters) – U.S. companies borrowed 4% more in August to finance their equipment investments than a year earlier, industry body ELFA said on Friday, as it raised doubts about the sustainability of the growth amid fears of slowing down.
Companies signed $8.8 billion in new loans, leases and lines of credit last month, compared with $8.5 billion a year earlier, according to the Equipment Leasing and Finance Association (ELFA). Borrowing increased by 5% from January.
“With the Fed’s latest 75 basis point jump in short-term interest rates and the prospect of a hard cut, time will tell if — and to what extent — those same business owners continue to step up and invest in equipment.” ELFA chief executive Ralph Petta said in a statement.
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ELFA, which reports economic activity for the nearly $1 trillion equipment finance sector, said loan approvals reached 75.2%, up from 78% in July.
The Washington-based body’s Lease 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 subsidiaries or financing units of Caterpillar Inc ( CAT.N ), Dell Technologies Inc ( DELL.N ), Siemens AG, Canon Inc and Volvo AB ( VOLVb . ST).
The Equipment Leasing & Finance Foundation, ELFA’s not-for-profit subsidiary, said its confidence index in September was 48.7%, compared with 50% in August. A reading above 50 indicates a positive business outlook.
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Reporting from Kannaki Deka in Bengaluru; Editing by Vinay Dwivedi
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