(Reuters) - U.S. companies borrowed $8.1 billion for capital investments in May, 20% higher than last year, the Equipment Leasing and Finance Association (ELFA) said, as an economic recovery fueled by rising vaccinations and easing curbs drove up demand.
In the second straight month of double-digit growth in borrowings, more companies lined up for new loans, leases and lines of credit compared with last year, but borrowings in May fell 17% from the previous month.
"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," ELFA Chief Executive Officer Ralph Petta said in a statement on Tuesday.
"With COVID-related payment modifications resolved for the most part, ELFA members report their portfolios performing well."
The index is based on a survey of 25 members, including Bank of America Corp (NYSE:BAC), CIT Group (NYSE:CIT) Inc and the financing affiliates or units of Caterpillar Inc (NYSE:CAT), Dell Technologies (NYSE:DELL) Inc, Siemens AG (OTC:SIEGY), Canon Inc and Volvo AB (OTC:VLVLY).
Washington-based ELFA, which reports economic activity for the nearly $1-trillion equipment finance sector, said credit approvals rose to 77.4% in May from 76.3% in April.
ELFA's leasing and finance index measures the volume of commercial equipment financed in the United States.
The Equipment Leasing and Finance Foundation, ELFA's non-profit affiliate, reported a monthly confidence index of 71.3 in June, in line with the May reading of 72.1.
A reading of above 50 indicates a positive business outlook.