Feb 23 (Reuters) - U.S. companies borrowed 30.1% more to finance equipment purchases in January than a year earlier, reaching the highest dollar amount in the last two decades, the Equipment Leasing and Finance Association said on Monday.

New loans, leases and lines of credit signed up by companies in January were $11.6 billion on a seasonally adjusted basis, an increase of 7.8% from the prior month.

The Washington-based trade association — which tracks economic activity in the equipment sector, valued at more than $1 trillion — said activity at banks was down 11.7% from December.

"It's still early, but I'm optimistic that continued AI investment will translate into another year of strong growth in new financing activity, even if the Fed (the Federal Reserve) decides to put rate cuts on ice for the foreseeable future," ELFA President and CEO Leigh Lytle said.

Small-ticket volume growth, a key indicator of equipment demand and broader economic conditions, grew by $5.3 billion in January, up 5.5% from a month earlier.

The ELFA CapEx Finance Index of leasing and finance activity is based on a survey of 25 member companies, including Bank of America BAC.N as well as the financing units of Caterpillar CAT.N, Dell Technologies DELL.N, Siemens AG SIEGn.DE, Canon 7751.T and Volvo AB VOLVb.ST.

The confidence index of the Equipment Leasing & Finance Foundation, ELFA's non-profit affiliate, rose to 67.6 in February, up from 64.6 in January - the highest level since January 2025.

(Reporting by Megavarshini G. Somasundaram in Bengaluru; Editing by Maju Samuel)

((Megavarshini.SomasundaramGnanasundari@thomsonreuters.com;))