Corporate financing for everything from industrial equipment to computer systems and office furniture rose nearly 15 percent in the first seven months of the year compared with a year earlier, but the increase a year ago was 24 percent, the trade association said.

Most of the borrowing is going toward updating older products rather than for new growth, ELFA said.

Companies took on $6.6 billion in loans, leases and lines of credit to fund equipment buys in July, up 15.8 percent from $5.7 billion a year earlier but down 17.5 percent from June's $8 billion, it said.

"There are so many levels of uncertainty that reach from the global economy to regulatory concerns to the tax-and-deficit situation," William Sutton, the group's chief executive, said in an interview.

"It's still pretty much a replacement business, and not any indications of expansion that we can see," he said.

Daniel Dyer, chief executive of Marlin Business Services Group in Philadelphia, said in the ELFA report, "Election year uncertainty coupled with burdensome regulations add to the unrest many companies are facing at this time." Marlin is an ELFA member.

ELFA has more than 550 members and reports economic activity for the $628 billion equipment finance sector.

Overall credit quality measures were generally steady to gradually improved in July.

ELFA said 2.2 percent of borrowers were late by more than 30 days on their debts, down from 2.4 percent in June.

Charge-offs, which reflect loans unlikely to be repaid, declined to 0.4 percent in July from 0.6 percent in June and were down 43 percent from July 2011.

The charge-off rate, which stood at 3 percent in 2009, has fallen steadily as companies clean up portfolios of poorly performing loans, ELFA said.

Credit approvals fell to 77.5 percent in July from 78.7 percent in June.

ELFA's monthly index is based on a survey of 25 member organizations, including Bank of America Corp and the financing affiliates or subsidiaries of Canon Inc, Caterpillar Inc, Dell Inc, Siemens AG and Verizon Communications Inc.

Separately, the Equipment Leasing & Finance Foundation, ELFA's non-profit affiliate, said e conomic, regulatory and political uncertainty helped drag down its monthly confidence index in August.

The sentiment measure fell to 50.2 in August from 51.5 in July and from a recent peak of 62.1 in April.