The Equipment Leasing and Finance Association (ELFA) reports that U.S. companies borrowed 8% less to finance equipment investments in October compared to the same month a year ago. Some businesses are feeling the impact of high interest rates, which is reflected in slight increases in both losses and delinquencies, according to ELFA CEO Ralph Petta.
Despite sound metrics in the U.S. economy, participants report that this softness in credit quality is indicative of challenges experienced by some businesses as they operate in a higher interest rate environment, constrained by reports of a pull-back in bank lending and supply chain disruption, said Dennis Bolton, Head of North America Equipment Finance at Gordon Brothers.
In October, U.S. companies signed up for $10.4 billion worth of new loans, leases and lines of credit, up from $9.7 billion a month ago, ELFA said. Credit approvals also improved month-on-month, touching 76% in October, up from 73.6% in September.
ELFA’s non-profit affiliate, the Equipment Leasing & Finance Foundation’s confidence index stands at 42.8 in November, an increase from 40.1 in October indicating a positive business outlook above 50 indicates a positive business outlook