(Story corrects fifth paragraph to show delinquency rate, not default rate, rose in January)
By Ann Saphir
(Reuters) - U.S. small business borrowing fell 13 percent in January to the lowest level in more than a year, data released on Tuesday showed, a fresh sign that economic growth could weaken in the coming months.
The Thomson Reuters/PayNet Small Business Lending Index registered 118.2 in January, the lowest level since November 2014. The PayNet index typically corresponds to U.S. gross domestic product growth one or two quarters ahead.
"This is a dramatic form, an extreme form of hunkering down," said Bill Phelan, president of PayNet, noting that January's level of borrowing is not even enough to replace worn-out equipment, let alone buy new machines.
Small business borrowing is a key barometer of growth because little firms tend to do much of the hiring that fuels economic growth.
The delinquency rate on loans more than 30 days past due is also showing "a little bit of erosion," Phelan said. The delinquency rate rose in January to 1.48 percent, the highest percentage since June, separate data from PayNet showed.
PayNet collects real-time loan information such as originations and delinquencies from more than 325 leading U.S. lenders.
Reporting by Ann Saphir; Editing by Paul Simao