Sept 3 U.S. small businesses boosted borrowing
in July, pushing the Thomson Reuters/PayNet Small Business
Lending Index to its highest level in more than seven years,
according to data released on Wednesday.
The increase, to 128.5 from 120.0 in June, suggests small
business owners are investing in their companies well above what
is needed simply to replace outmoded or worn equipment, PayNet
founder Bill Phelan said.
It was the highest level since March 2007, and the third
highest level since the index launched in 2005.
"A solid third quarter is taking shape here, for small
businesses and for the U.S. economy," Phelan said. The index is
correlated with U.S. gross domestic product growth two to five
months ahead. "I think they are seeing demand right now. ...
This has got to be showing some strength in orders."
The rise in borrowing is also good news for jobs, Phelan
said, citing a historically strong correlation between loan
growth and job creation.
A separate index released by PayNet showed loan
delinquencies ticked up from the prior month, with delinquencies
of 31 to 180 days, PayNet's broadest measure of late loan
payments, at 1.55 percent of all loans made, compared with 1.53
percent in June.
The index hit a high of 4.73 percent in August 2009. The
record low was 1.44 percent last October.
PayNet collects real-time loan information such as
originations and delinquencies from more than 250 leading U.S.
(Reporting by Ann Saphir; Editing by Leslie Adler)