Fox Business is reporting growth in small business borrowing:
The Thomson Reuters/PayNet Small Business Lending Index, which measures the overall volume of financing to U.S. small businesses, rose 20 percent in December from the same month a year earlier, PayNet said.
That is the fastest monthly gain since March 2006, with the index registering the highest level of borrowing since July 2008. Separate data also released on Tuesday showed a decline in small business loan delinquencies.
“They are borrowing more and they are finding it easier to pay their bills,” William Phelan, PayNet’s president and founder, said in an interview. “The recovery is growing and remains on a solid footing.”
The surge in borrowing by small businesses, seen as harbinger for the broader economy because they account for as much as 80 percent of new hiring, comes amid other signs the economy is headed for renewed expansion.
This is great news for the economy, and with interest rates at record lows it is a decent time to talk to a loan officer. Don’t be surprised if you don’t qualify for a loan without substantial business credit history- while there is money to loan, banks are only making very conservative loans for established businesses. Newer enterprises should consider alternative types of loans like factoring, credit cards, and peer to peer borrowing from sites like Prosper.
