(Reuters) - U.S. small business borrowing rose 17 percent in February, data released on Monday showed, making up for ground lost over the past several months that had raised prospects of weak economic growth ahead.
The Thomson Reuters/PayNet Small Business Lending Index jumped to 138 in February from January’s downward-revised 117.7, the lowest level in nearly two years. The PayNet index typically corresponds to U.S. gross domestic product growth one or two quarters ahead.
Borrowing and investment have “come back to life,” said Bill Phelan, president of PayNet, adding that he expects lending growth to “plod along” rather than boom in coming months.
Small business borrowing is a key barometer of growth because little firms tend to do much of the hiring that drives economic gains.
Loans more than 30 days past due fell in February to 1.47 percent, separate data from PayNet showed. The decline suggests improving financial health even as companies borrow more.
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 Cynthia Osterman