Equipment financing climbed 20 percent year-over-year in December

Businesses borrowed more in December to finance new equipment purchases, suggesting firms are taking steps to invest in growth strategies and expansion, according to the Equipment Leasing and Finance Association's Monthly Leasing and Finance Index. The index shows U.S. businesses financed a total of $10.8 billion worth of new equipment last month, marking a 20 percent increase from the same period in 2010 and a 74 percent hike from the previous month. Cumulative new business volume for the whole year climbed by 25 percent, compared to 2010. "The dramatic surge in December new business volume is the result of several factors, which, when combined, form an almost 'perfect storm' of unusually strong business activity," said ELFA president and CEO William Sutton. "First, demand for the lease/finance product increased as businesses replenished their capital equipment stock." The uptick in new business volume seems to support recent bank data suggesting that lenders are loosening their credit decisions and policies for both commercial and consumer borrowers. Combined with the natural commotion of the end of the year, the trend made for a particularly vibrant month of equipment financing.