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Canadian Small Business Lending Index Rises 4%

September 16, 2015, 07:04 AM
Filed Under: Industry News

PayNet, a firm that provides risk management solutions and market insight to the Canadian Commercial Finance Industry reports increasing investment by privately-held Canadian businesses. The Canadian Small Business Lending Index (CBLI) which measures the amount of new private investment in property, plant and equipment by hundreds of thousands of private Canadian businesses reached 135.8 from 130.3 up 4% over last year. 

This release shows organic growth in investment by Canadian private businesses. Although rate of investment is slower, it remains positive. This rate of increase remains less than the peak years, but it shows organic growth which can drive faster recovery for the Canadian economy.

 “The Canadian economy is in a state of transition,” notes William Phelan, president of PayNet, Inc. “This could be a lot worse. The consumer and the East are making up the slack in commodities and the West,” notes Phelan.

Mining and Farming showed contractions falling -4% and -10% respectively. At the same time, professional services companies increased investment 28% while retailers were up 19%.

“In 12 to 24 months the economy should fully reshuffle from energy to manufacturing and the consumer,” Phelan pointed out.  The PayNet Canadian Small Business Lending Index shows businesses serving energy sector Transportation -6% and Wholesale -20%

PayNet’s data reflects the fact that Canadian small businesses are outperforming the broader national economy, but that material strains exist in certain portions of the country.

Investment is contracting in the Western Provinces; Alberta -6% and Saskatchewan -8% which reflect the contracting Mining and Agriculture sectors in those two provinces. In the East, investment growth is up in Manitoba +4%, Ontario +8% and Quebec +6%.

While U.S. small businesses are consistently borrowing at double-digit annual growth rates during 2015 ranging from 10-13%, Canadian small business originations are expanding at a more modest growth rate. As the U.S. economy gains momentum, it should soften the contraction in Canada.

The outlook for the next quarter shows a reset of the financial health of Canadian private businesses is underway, as financial health remains strong, despite it deteriorating recently. “The Canadian Business Delinquency Index (CFLA CBDI) shows credit risk for Canadian small and medium sized businesses will rise slightly towards pre-recession levels over the next 12 months” according to Mr. Phelan.

PayNet’s economic indices will be presented to CEO’s and regulators at the Canadian Finance Leasing Association (CFLA) National Industry Conference September 16-18, 2015 in Ottawa.   PayNet is now launching 53 Canadian economic indices that measure current business conditions in the Canadian small business economy by Province and Industry Sector at this conference and speaking Thursday September 17, 2015 on Measuring The Industry. These indices provide early signals of economic growth, demand for capital, business fixed investment and a gauge of financial stress across multiple sectors of the economy and can be accessed at

The PayNet Canadian Business Lending Index is a key measure of metrics for Canadian private companies, small held by private owners and not traded on The Toronto Stock Exchange, which quantifies their business investment and financial health. 

To access the Canadian Small Business Lending Index reports, click here.

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