Small Business Borrowing Jumps
4% Gain Over Same Time Last Year
In a further sign that access to capital is improving, a new survey shows that lending to small businesses increased in January. The latest Thomson Reuters/PayNet Small Business Lending Index, which gauges the amount of companies that are receiving loans from banks and financial institutions, came in strong at 117.2, a 4% gain over the same time period last year.
“Based on this latest data release, the growth of the economy in the next two to five months will begin to heat up as asset forming investments encourage other add-on spending,” said William Phelan, president of PayNet. “January investment is especially promising in light of other weak financial releases in January. Had small businesses not been as active, economic releases would have been even weaker in January.”
While the lending index was decreasing, another piece of data released by PayNet yesterday added to the belief that the underlying economy for small companies in the U.S. is improving. The report showed that loan delinquencies ticked lower in the most recent period, reaching near-record lows. Delinquencies of 31-to-180 days in January slipped to 1.45% of all loans made, from 1.46% in December, PayNet reported. A measure of accounts overdue as a percentage of all loans hit a high of 4.73% in August 2009, while the record low was reached last October at 1.44%.