By Bob Tita
A survey of credit providers showed that loans and leases for
business equipment in the U.S. rose 23% in April from a year ago,
as companies went on their largest buying spree of the year so
far.
Respondents to the Equipment Leasing and Finance Association's
monthly survey published Thursday said they financed $7.5 billion
of new equipment last month, up from $6.1 billion in April 2012.
Financed purchases in April rose 10% above March. April's volume
was the largest since December. For the year, business volume is up
8% over the same time in 2012.
Observers said the robust financing volume suggests U.S.
businesses are stepping up their capital investments after a
prolonged stretch of reduced spending caused by weak sales growth
and anxiety about the U.S. government budget and taxes.
"Over the last four years businesses of all sizes have pursued a
defensive strategy of austerity," Paul J. Menzel, CEO of Financial
Pacific Leasing LLC in Federal Way, Wash., said. "The anemic
revenue story may be coming to an end as businesses seem to be
going on the offensive and investing."
The Equipment Leasing and Finance Foundation's confidence index
for May rose to 56.7 from 54 in April, reflecting participants'
improving sentiment about spending.
Credit-portfolio quality measured by the survey was slightly
better from a year ago and stable with recent months. Loans and
leases past due by more than 30 days dropped to 2% of survey
respondents' net receivables in April, down from 2.7% in April 2012
and unchanged from the 2% recorded in March and February.
Charge-offs amounted to 0.3% of respondents' net receivables
last month, down from 0.6% a year earlier, but unchanged from 0.3%
in March. The approval rate for loan and lease applications was
77.2% in April, compared with 76.4% a year earlier and 78.4% in
March.
The 25 respondents to the association's survey included banks
Wells Fargo & Co. (WFC), Bank of America Corp. (BAC) and Fifth
Third Bancorp (FITB), as well as finance units for manufacturers
Caterpillar Inc. (CAT), Deere & Co.(DE), Volvo Group and Dell
Inc. (DELL).
Write to Bob Tita at robert.tita@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires