(Reuters) - U.S. companies' borrowings for capital investments fell about 26% in May from a year earlier, as businesses put spending on hold amid the coronavirus crisis, the Equipment Leasing and Finance Association (ELFA) said on Wednesday.
Companies signed up for $6.7 billion in new loans, leases and lines of credit last month, down from $9.1 billion a year earlier. Borrowings fell 18% from the previous month.
"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," ELFA Chief Executive Officer Ralph Petta said.
This economic downturn is particularly evident in market segments serving customers in the construction, hotel, tourism, leisure and food service industries, he added.
Washington-based ELFA, which reports economic activity for the nearly $1-trillion equipment finance sector, said credit approvals totaled 68.1% in May, down from 71.7% in April.
ELFA's leasing and finance index measures the volume of commercial equipment financed in the United States.
The index is based on a survey of 25 members, including Bank of America Corp (N:BAC), CIT Group Inc (N:CIT) and the financing affiliates or units of Caterpillar Inc (N:CAT), Dell Technologies Inc (N:DELL), Siemens AG (DE:SIEGn), Canon Inc and Volvo AB (ST:VOLVb).
The Equipment Leasing and Finance Foundation, ELFA's non-profit affiliate, reported monthly confidence index of 45.8 in June, up from 25.8 in May.
A reading of above 50 indicates a positive business outlook.
"We are starting to see a gradual boost from the fiscal and monetary stimulus efforts but it continues to be uneven across industry sectors," said Rockwell Financial Group President Aylin Cankardes, who currently serves as a trustee on the board of ELFA Foundation.
"As states continue to reopen it should help stabilize activity in the coming months."