U.S. Company Borrowing Jumps 6% in October

The number of U.S. businesses choosing to borrow to spend on capital investment continues to increase. According to a trade group representing capital equipment lenders, it rose 6 percent in October compared to last year. The Equipment Leasing and Finance Association (ELFA), shared that the companies signed up for $8.9 billion in new loans, leases and lines of credit in October alone; this is an increase from $8.4 billion a year ago.

The driving force behind this increase in volume is the expanding U.S. economy and lower corporate taxes. This combination continues to support capital spending by U.S. companies. In their reports, Washington-based ELFA revealed that credit approvals were 76.5 percent in October, up from 75.7 percent in September.

The ELFA reports economic activity for the $1 trillion equipment finance sector. It’s leasing and finance index measures the volume of commercial equipment financed in the United States. The ELFA’s index is based on a survey of 25 members, including: Bank of America, BB&T, CIT Group and the financing affiliates or units of Caterpillar, Siemens and Canon. Ultimately, this index is designed to complement the U.S. Commerce Departments’ durable goods report (which usually precedes by just a few days).

A reading of above 50 indicates a positive outlook. According to the Equipment Leasing and Finance Foundation – ELFA’s non-profit affiliate – its index for November was 58.5; this is down from the October index of 63.2.

What does all of this mean for small business owners in the U.S.? In recent years, borrowing has been easier to secure for many businesses. Banks are even taking steps to make sure access is improved for startups and small businesses as well. However, there are still many entrepreneurs that struggle to secure the funds they need.

Without enough capital, these business struggle to cover rent, purchase equipment, manage startup costs, fund growth and meet payroll. Seeing a growing need, alternative lenders have pushed to fill this gap. There solutions promise quick cash, and in many cases, they offer better features and options than traditional lending.

Merchant loans, for example, provide fast cash – in as little as 24 hours. The application can be completed online in a matter of minutes; no need to wait weeks or months for the bank’s approval. In many cases, alternative lending options also involve an easy, flexible collections process. This is ideal for a growing business that experiences unexpected opportunities for further growth.

Author Bio:As the FAM account executive, Michael Hollis has funded millions by using Merchant Loan solutions. His experience and extensive knowledge of the industry has made him financeexpert at First American Merchant.

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