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PayNet: U.S. Small Business Borrowing Rises to Six-Year High

September 04, 2013, 07:01 AM
Filed Under: Economy

PayNet's latest analysis of small business investment bodes well for economic growth. The Thomson Reuters/PayNet Small Business Lending Index (SBLI) increased 11% in July to 117.7, the highest level since August 2007. The Index, which measures the amount of new investment expansion, reflects an accelerating growth trend with second quarter 2013 growth 8% higher than the same period one year ago versus only 5% for first quarter 2013 compared to first quarter 2012.

Meanwhile, financial health of small businesses continue to improve with credit risk remaining historically low as the Thomson Reuters/PayNet Small Business Delinquency Index (SBDI) held steady at 1.19%. The SBDI is an indicator of the future health of the financial sector of the US economy. "This report sends a positive signal that small businesses may finally be seeing the economic stability that will prompt them to invest and grow," 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. Recent studies show that every 1 point increase in the index represents about 42,000 new jobs for the economy.

To read the full Reuters news release, click here.

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