Borrowing by U.S. companies up

[pioneer]

By Lynn Adler

(Reuters) - Borrowing by U.S. companies to buy equipment jumped in January from a year ago, though it slid from December's rush to close loans before year-end, and credit quality improved to pre-recession levels, the Equipment Leasing and Finance Association said on Friday.

Lingering uncertainty about the European economy is keeping businesses cautious, stuck largely in a cycle of purchases to replace aging equipment rather than for expansion.

"New equipment acquisition will gradually and steadily improve," ELFA Chief Executive William Sutton said in an interview. "We are in the midst of regaining some of the momentum that was lost during the recession. Overall, we are back to the pre-recession levels of growth."

Amid signals of gradual economic and job growth, businesses signed on for $5.1 billion in loans, leases and lines of credit in January, 53 below December's spike to $10.8 billion but 21 percent higher than $4.2 billion a year ago, ELFA said.