Equipment loans on the rise for US businesses

Businesses take out loans for a variety of reasons in order to keep operations going. One option of alternative finance for companies is equipment loans, which help pay for the cost for essential items. According to NASDAQ, a recent survey released by the Equipment Leasing and Finance Association (ELFA) revealed that lenders have extended $6.2 billion in loans in May, which is a 1.6 percent increase from April. For the year-to-date, equipment spending has increased by 15.9 percent from 2011. While there are concerns about the economy and the ongoing European financial crisis, the ELFA says the recent numbers show that American businesses believe the economy is improving. Companies are now expanding their efforts to update or replace old equipment, something that was postponed due to the economic recession. The Chicago Tribune reports that the recent increase in equipment loans is a 10.7 percent increase from May of last year, when $5.6 billion was obtained by businesses. "The increase in new business volume, very low aging of receivables, very low average charge-offs, credit approvals continuing to stay high - all these trends are really going in the right direction," said William Sutton, ELFA CEO.