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

December 03, 2013, 06:59 AM
Filed Under: Economy

The latest results of small business investment trends released by PayNet signal a very positive sign for the economy with solid expansion at low risk for the next few months. The Thomson Reuters/PayNet Small Business Lending Index (SBLI) increased in October to 120.4, the highest level since August 2007, reflecting a 10% increase over September and a 12% rise over last year. In September, the index registered a reading of 109.9.

Implicit in this report is that small businesses are responding to organic growth for more goods and services. This growth is in sharp contrast to the investment that occurred in 2010-2011 to replace old worn out property, plant and equipment.
Meanwhile, the Thomson Reuters/PayNet Small Business Delinquency Index (SBDI) declined 2 basis points to 1.14% in October, lower than the previous best delinquencies in January, 2006. The SBDI indicates further improvement in credit risk, which already stands at all-time low levels,
The SBLI and SBDI are leading indicators of the future health of the of the US economy. "This report is a confidence booster for the US economy. If small businesses increase investment they are responding to more demand for their goods and service, which is a big plus for GDP over the next 2-5 months," says William Phelan, president of PayNet.

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