In October, U.S. companies borrowed 8% less to finance their equipment investments compared to the same period last year, according to the Equipment Leasing and Finance Association (ELFA). High interest rates had an impact on some businesses, as reported by ELFA, which tracks economic activity in the nearly $1 trillion equipment finance sector and surveys banks like Bank of America and financing affiliates of equipment manufacturers.

Despite strong metrics in the U.S. economy, ELFA CEO Ralph Petta stated that participants reported slight increases in both losses and delinquencies. This softness in credit quality was attributed by Petta to the challenges faced by businesses as they operate in a higher interest rate environment, constrained in certain sectors by reports of a pullback in bank lending.

Dennis Bolton, Head of North America Equipment Finance at Gordon Brothers, said that the trends observed are consistent with the economic environment and market turmoil resulting from quantitative tightening, inflation, employment, and supply chain disruption.

In October, U.S. companies signed up for $10.4 billion worth of new loans, leases and lines of credit, up from $9.7 billion a month earlier, according to ELFA. Credit approvals also improved month-on-month to touch 76% in October from 73.6% in September.

The Equipment Leasing & Finance Foundation’s non-profit affiliate reported its confidence index for November stood at 42.8%, an increase from 40.1% in October. A reading above 50 indicates a positive business outlook