On Wednesday, the Washington-based Equipment Leasing and Finance Association had unveiled that the US business borrowing for equipment, the most-timely indicator to business investors’ intent towards tapping their money into the financial system, fell by 26 per cent in May compared to the same time a year earlier, adding further glooms into the US economy which USTR confirmed had entered into a recession back in February this year.
Aside from that, latest ELFA report that shown the US business borrowing for equipment fell more than a quarter on a percentage basis on May despite an ease of lockdown measures, comes over the heels of growing worries that a second wave of pandemic outbreak might have been brewing off in several US states.
In tandem, according to the Washington-based, 59-year-old Equipment Leasing and Finance Association’s Wednesday’s report, businesses signed off for $6.7 billion in new debts, leases and credit lines in May, down from a $9.1 billion on a year-on-year basis, while on a monthly basis, borrowing fell by 18 per cent compared to April, during the phases of forced business closures that nearly stalled the global economy, suggesting a further downturn in business borrowing over the coming months as prospects of a quicker economic recovery has been waning amid a steady rise in pandemic cases in the United States.
Pandemic-led economic downturn catalyses the new weakening in business borrowings
Meanwhile, adding that the credit approvals fell by 71.7 per cent from a month earlier in May, Chief Executive of the Washington-based ELFA that reveals economic activities for a roughly $1 trillion equipment financing sector on a monthly basis, Ralph Petta said in a statement on Wednesday, “The downturn in the economy precipitated by the COVID-19 pandemic crisis is responsible for new business softening in the equipment finance space during the month of May. ”