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PayNet: Small Business Investment Back on Track in April

June 03, 2013, 07:00 AM
Filed Under: Economic Commentary

Investment by millions of small businesses jumped in April to get back to exactly where it began the year. The Thomson Reuters/PayNet Small Business Lending Index (SBLI) increased 17% in April over the same month last year to 110.5 from the slightly revised March value of 99. The SBLI measures the amount of new commercial loans and leases taken by small businesses to expand property, plant, equipment, tools, services or business units. This latest release shows small business investment remains sluggish, but the good news is they’re not heading for the exits.
Meanwhile, the credit cycle remains favorable. Small businesses are paying bills on-time with greater frequency than at any time in years. The Thomson Reuters/PayNet Small Business Delinquency Index (SBDI) decreased 1 basis point to 1.26% in April. "Credit conditions on small businesses remains favorable given the low probability of default for small businesses in 2013 and 2014. Trend-line growth for small business investments is slowing while credit risk remains low. One-half of GDP is well positioned to get in the game,” says William Phelan, president of PayNet.
PayNet's report on small businesses is seen as a leading economic indicator of GDP by two to five months since small companies react quickly to changes in the economy.

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