Canadian small business lending rises in June: PayNet

OTTAWA (Reuters) - Commercial borrowing by small businesses in Canada rose at the end of the second quarter, data from PayNet showed on Wednesday, underscoring the expectation the economy is recovering after a mild recession in the first half of the year.

PayNet’s Canadian Small Business Lending Index rose to 135.8 in June from 134.0 in May.

While there was slowing or no growth in the provinces most exposed to the slump in the price of oil, that was offset by growth in other parts of the country, PayNet’s president Bill Phelan said.

There is also a transition occurring with growth moving from commodities-related firms to consumer ones, he said. The PayNet data was the latest to suggest that although the economy shrank in the first half of the year, it headed into the third quarter on stronger footing.

“We see it as a short-lived, not full-blown recession,” said Phelan.

Moderate loan delinquencies - those that are behind in payments by 30 days or more - edged up to 1.08 percent of loans in June from 1.01 percent the month before.

Loans that were more than 90 days late similarly rose to 0.32 percent from 0.29 percent. Even so, delinquency rates are still quite low, suggesting the financial health of Canadian companies is strong, said Phelan.

Editing by Diane Craft