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PayNet: Small Business Borrowing Rises in August for 2nd Consecutive Month

October 02, 2012, 07:00 AM
Filed Under: Economy

Reuters reported that lending to small U.S. businesses rose in August for a second straight month providing a sign the economy may have been regaining its footing even before the U.S. central bank's latest round of stimulus.

According to the report, the Thomson Reuters/PayNet Small Business Lending Index, which measures the overall volume of financing to small U.S. companies, rose to 109.9 from July's upwardly revised 106.7, PayNet said. It was the highest level this year. PayNet had initially reported the July figure as 103.8. Borrowing was up 10 percent from a year earlier.

"We've got a winning streak going," PayNet founder Bill Phelan said. "These business owners are looking out three, to six, to nine months, and they are seeing some positive profit-producing opportunities: there must be something these business owners are seeing."

PayNet's lending index typically correlates to economic growth a quarter or two in the future.

Reuters also reported that separate PayNet data showed companies were under less financial stress. Accounts overdue by 30 days fell to a new record low - 1.16 percent of the total - from 1.18 percent the previous month.

Accounts behind 90 days or more, or in severe delinquency, dipped to 0.25 percent from 0.27 percent and accounts behind 180 days or more fell to 0.32 percent from 0.34 percent.

PayNet collects real-time loan information, such as originations and delinquencies, from more than 250 leading U.S. lenders.

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