Financing volume for business equipment purchases grew by 16.7% in July, the largest increase in two years, according to a survey of banks and finance companies.

Respondents to the Equipment Leasing and Finance Association's monthly survey released Monday said they financed $5.6 billion of new equipment in July, compared with $4.8 billion a year earlier. The July increase marked the fourth straight month of year-over-year growth in the financing survey, following 20 consecutive months of declines caused by the recession and reduced access to lending.

The July survey results provide further evidence of a recovery in the $518 billion-a-year commercial leasing and finance industry.

"It appears we're heading in the right direction and our members remain cautiously optimistic that this trend will continue," said William Sutton, president of the Washington-based trade association.

Sutton added the survey mirrors recent government statistics showing a 22% increase in the annual rate of business investment in equipment and software during the second quarter.

Seventy percent of financing applications submitted in July were approved; the same level as in June and about 7% higher than a year ago in July.

Loans and leases past due by more than 30 days totaled 3.5% of survey respondents' net receivables, down 10% from a year ago, but slightly higher than June's level.