U.S. companies increased their borrowing to finance equipment purchases by 14.2% in February compared to the previous year, according to the Equipment Leasing and Finance Association (ELFA). The surge was primarily driven by heightened activity among independent providers. ELFA is a Washington-based trade association monitoring economic activity within the over $1 trillion equipment finance sector. Its insights are derived from a survey of 25 members, including major financial institutions and the financing arms of manufacturing and technology corporations.
In February, companies signed new loans, leases, and credit lines totaling $11 billion on a seasonally adjusted basis. This figure represents a 4.7% decrease from January. Small-ticket volume growth, viewed as a crucial indicator of equipment demand and overall economic health, reached $4.4 billion. While this marks a 14.7% drop from the previous month, it remains above the 12-month trailing average of $3.5 billion.
ELFA President and CEO Leigh Lytle noted that the survey data precedes both the conflict in Iran and the March FOMC meeting, suggesting potential for increased volatility in the first half of the year. The association’s monthly confidence index saw a decrease in March, registering at 61 compared to 67.6 in February. This decrease indicates a more cautious outlook among industry participants.
