Small Businesses In U.S. Are Borrowing More: Paynet

Small Business Lending Is Up

U.S. small businesses increased their borrowing in September, an index released on Monday showed.

That borrowing is a good sign that companies are confident that U.S. consumer spending will increase heading into the holiday shopping season.

The Thomson Reuters/PayNet Small Business Lending Index increased to 140.4 in September, a sharpt increase from 135.6 reading in August.

The index is also up 11% from a year earlier, led by firms borrowing in the transportation, warehousing, construction, accommodation, food, healthcare and real estate industries.

“It’s consumer, consumer, consumer,” said Bill Phelan, President of PayNet. “This above-average growth trend means that small business is going to deliver material amounts of growth to GDP in the fourth quarter.”

The index hit a record in June and has typically tracked ahead of the u.S. gross domestic product by two to five months.

U.S. GDP growth slowed to a 1.5% annual pace last quarter, but consumer spending was up.

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The delinquency rate on loans more than 30 days past due increased to 1.45% in September from 1.44% the prior month.

PayNet’s numbers arrive by way of more than 250 leading U.S. lenders.

Written by Lane Hanson

Lane Hanson

Lane Hanson is BusinessPundit's Economy Editor. He reports on major changes in the US and Global Economies.