The Equipment Leasing and Finance Association (ELFA), a Washington DC-based trade body that represents companies alongside manufacturers in a $1 trillion US equipment finance sector, said on Tuesday that American companies had borrowed a stark upsum of $8.1 billion for fresh capital spending in May, above 20 per cent compared to a month earlier, following a robust reopening of US economy stemming from massive Government stimulus alongside a near-zero interest rate.
Aside from that, an acceleration in vaccination drive alongside an ease in pandemic-led restrictions had led to a salubrious shoot-up in domestic demands, eventually prodding businesses to borrow more in bids to cope up with an unprecedented scale of demand-surge.
On top of that, an increase in the prices of raw materials coupled with a rise in workers’ wages amid a steep labour shortage, had forced businesses to step up investments.
ELFA says US business borrowings rise 20% last month
According to the Equipment Leasing and Finance Association (ELFA) statement released earlier in the day, US companies had logged a second straight month of double-digit growth in borrowings with more companies lining up for leases, credit lines and new debts following a sharp rise in domestic demands as beforementioned.
Nonetheless, US business borrowings fell 17 per cent in May compared to the same time a year earlier. Meanwhile, referring to a relatively strong economic activity across the United States over Q2, 2021, ELFA Chief Executive Ralph Petta said in a statement following the announcement, “While overall industry performance is relatively strong during the first half of this year, even more robust demand for financing is being constrained by supply chain shortages in several economic subsectors”.