In November 2013, U.S. small businesses increased their borrowing from a year ago, according to the Thomson Reuters/PayNet Small Business Lending Index.
This suggested continued economic growth ahead even as the Federal Reserve starts to reduce its massive monetary stimulus. The index that measures the volume of financing to small companies, rose 1 percent in November from a year earlier, to 111.4, PayNet said. The data also revealed that November had the highest per-day borrowing rate of 2013 despite just 20 working days.
“It’s another sign of continued expansion,” PayNet founder Bill Phelan said. Small businesses “are seeing more demand for goods and services, and that’s all good for GDP.”
Loans are usually taken by small companies to purchase new tools, equipment, and factories that indicate more borrowing can be an early signal of increased hiring ahead.
According to the Thomson Reuters/PayNet Small Business Delinquency Index, delinquencies of 31 to 180 days in November rose to 1.45 percent of all loans made, from 1.44 percent in October.
Real-time loan information such as originations and delinquencies from more than 250 leading U.S. lenders is collected by PayNet. The lending index of PayNet has historically correlated to overall economic growth one or two quarters in the future.