Jan 23 (Reuters) - U.S. companies borrowed 2% more in December to finance equipment investments compared with a year earlier, industry body Equipment Leasing and Finance Association (ELFA) said on Tuesday.

Companies signed up for new loans, leases and lines of credit worth $12.5 billion in December, up 51% from the preceding month.

"Positive year-end new business volume shows that U.S. businesses continue to rely on equipment financing to operate and grow," ELFA President and CEO Leigh Lytle said.

ELFA, which reports economic activity for the nearly $1-trillion equipment finance sector, also said credit approvals for U.S. companies was 75% in December, down from 76% a month ago.

The Equipment Leasing & Finance Foundation, ELFA's non-profit affiliate, said its confidence index in January stood at 48.6, higher than the 42.5 in December. A reading above 50 indicates a positive business outlook.

Washington-based ELFA's leasing and finance index is based on a survey of 25 members, including Bank of America and financing units of Caterpillar, Dell Technologies , Siemens AG, Canon Inc and Volvo AB . (Reporting by Nathan Gomes in Bengaluru; Editing by Shilpi Majumdar)