March 21 (Reuters) - U.S. business borrowing to spend on capital goods jumped 31 percent in February from a year earlier as companies prepare to meet a surge in demand following recent tax cuts, the Equipment Leasing and Finance Association (ELFA) said.
Companies signed up for $7.7 billion in new loans, leases and lines of credit last month, up from $5.9 billion a year earlier. Borrowing rose 13 percent from January.
"Momentum spurred on by recently enacted tax changes together with an economy beginning to hit on most, if not all, cylinders, is creating a compelling demand cycle for capital equipment acquisition by American businesses, large and small," ELFA Chief Executive Ralph Petta said in a statement.
Washington-based ELFA, a trade association that reports economic activity for the $1 trillion equipment finance sector, said credit approvals totaled 74.2 percent in February, down from 76.9 percent in January.
ELFA's leasing and finance index measures the volume of commercial equipment financed in the United States. It is designed to complement the U.S. Commerce Department's durable goods orders report, which it typically precedes by a few days.
ELFA's index is based on a survey of 25 members that include Bank of America Corp, BB&T Corp, CIT Group Inc and the financing affiliates or units of Caterpillar Inc , Deere & Co, Verizon Communications Inc, Siemens AG, Canon Inc and Volvo AB .
The Equipment Leasing & Finance Foundation, ELFA's non-profit affiliate, said its confidence index fell to 72.2 in March from 73.2 in February.
A reading of above 50 indicates a positive outlook. (Reporting by Sanjana Shivdas in Bengaluru; Editing by Anil D'Silva)