US borrowings for business equipment spring up 6% in October, says ELFA



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US borrowings for business equipment spring up 6% in October, says ELFA

Earlier this week, ELFA (Equipment leasing and finance association) data had unveiled that the US companies borrowing for business equipment jumped 6 per cent last month, illustrating an inflection point that could lay the framework of a soft landing for a US economy which has been bracing for a recession as early as by early-2023.

According to ELFA’s US business borrowing for equipment data, a crucial indicator to future investment, US companies had signed up for an $11.3 billion new debts, leases and credit lines in October compared to a reading of $10.7 billion underpinned at the same time a year earlier, while the borrowing figures are up about 6 per cent year-to-date.

US business borrowing for equipment rise despite gloomy outlook

In point of fact, latest ELFA data came against the backdrop of a submissive growth in US economy over third quarter, however, US factory activities still remained a drag.

Nonetheless, US services sector activities had rebounded last month, while orders for new US-borne goods rose marginally, too. Meanwhile, followed by the release of the data, Finloc USA Inc’s Chief Revenue Officer James Currier said in a statement, “We see the economic tightening as an opportunity for carriers to get back on track with normal equipment replacement cycles that have been postponed and explore new verticals”.

More importantly, addressing that the US businesses must adapt to the US Fed’s hawkish monetary policy in order to grapple with an asphyxiating upsurge in borrowing costs, Currier added, “Business reorganizations will require lenders to adapt to changing practices and operations”.

ELFA that represent economic activity of a nearly a $1-trillion equipment finance sector, in tandem, added that the loan approvals fell marginally last month to 77 per cent compared to a reading of 77.3 per cent a month earlier.