U. S. Firms Boost Equipment Borrowing Amid Economic Uncertainty

In December, U. S. companies increased their borrowing for equipment by 5. 9% compared to the previous year, hitting near-record levels. This surge in financing, which included loans, leases, and lines of credit, totaled $10. 6 billion on a seasonally adjusted basis, marking a rise from the previous month. The trade association behind these findings, based in Washington, noted that while overall activity in the equipment finance sector remained robust, bank activity saw a slight dip of 1. 2% from the prior month. This sector is significant, with a market value exceeding $1 trillion.Despite economic uncertainties, the equipment finance industry has shown resilience and growth. Industry leaders predict continued demand and stable financial conditions in the coming year, with expectations of potential interest rate cuts later in the year. A key indicator, the ELFA CapEx Finance Index, is derived from a survey of 25 members, including major financial institutions and companies like Bank of America and Caterpillar. This index reflects the leasing and finance activity within the sector. Additionally, the confidence index of the Equipment Leasing & Finance Foundation reached an 11-month high in January, indicating a positive business outlook. A reading above 50 on this index suggests optimism among industry professionals.