The Equipment Leasing and Finance Association (ELFA) reported on Wednesday that US companies’ borrowings to finance capital expenditures dropped by almost 8% in April compared to last year. According to ELFA CEO Ralph Petta, it’s unclear whether higher borrowing rates are limiting liquidity or if the decline is temporary. ELFA is a trade group that measures the volume of commercial equipment financed in the US. Their Lease Finance Index is based on a survey of 25 members, including divisions of Bank of America, Caterpillar, Dell Technologies, Siemens, Canon, and Volvo. The survey found that the credit approval rate totalled 77.3%, up from 75.3% in March.
Despite this, the Equipment Leasing and Finance Foundation, which is ELFA’s non-profit affiliate, saw a confidence index of 40.6 in May, down from 47.0 in April. Results above 50 indicate a positive outlook. Petta stated that heads of the business sector are pessimistic about the near-term outlook for both the economy and the equipment finance industry.