* Canadian business lending index rises 4 pct in Q1 from Q4
* Borrowing up 29 pct year-over-year
* Commercial loan delinquencies also rise
By John Tilak
TORONTO, May 29 Commercial borrowing by small
and medium-sized businesses in Canada climbed in the first
quarter, driven by robust domestic and global demand, a PayNet
survey showed on Wednesday.
PayNet, which tracks commercial financing for millions of
North American small and medium-sized businesses, said its
Canadian Business Lending Index rose to 194, the highest level
since it was created in 2005.
The index rose 4 percent in the first quarter from the
fourth quarter and was up 29 percent year-over-year.
"The demand for our goods and services, and our resources is
definitely fueling the increase in investment by Canadian
businesses," Anthony Zambon, director of PayNet Canada, said.
"The data shows small- and medium-sized businesses are
resilient and continuing to invest, with the prospect of
supporting economic growth in the near future."
Small- and mid-sized businesses have been stepping up
investment in the construction of plants and commercial
buildings and in machinery and equipment, he added.
The advance marked the 10th consecutive quarter of growth
since the index bottomed out in 2010, and the seventh straight
double-digit advance on a year-over-year basis.
The PayNet data, which tracks lending across sectors
including manufacturing, retail and transportation, showed that
commercial loan growth in Canada outstripped growth in the
"The U.S. was been wallowing," Zambon said. "The growth
trend of investment by U.S. private companies is slowing. The
U.S. small business lending index has fallen for the third month
in a row."
The commercial lenders include independent finance
companies, big banks and nonbank players such as machinery
makers, whose loans and leases to customers are secured against
the equipment sold.
PayNet's Canadian unit collects data on more than 700,000
loan contracts worth more than US$47 billion.
LOAN PAYMENT DELAYS LENGTHEN
Other data from PayNet showed higher loan delinquencies.
Moderate loan delinquencies - defined as those being late by
30 days or more - rose to 1.35 percent of total loans in March
from 0.80 percent in December. It was the highest rate in about
Severe loans in arrears - those behind more than 90 days -
climbed to 0.38 percent in March, from 0.29 percent in December.
"With greater investment comes increased credit risk,"
Zambon said. "That's a reflection of increased activity and
higher risk being taken by the lenders. That shows a return to
more normal credit conditions."