Lending to small businesses has increased to its highest levels in almost two years after borrowing rose 16 percent in September compared with the same time a year ago, Reuters reports.
The latest data available from the Thomson Reuters/PayNet Small Business Lending Index, which measures the overall volume of financing to U.S. small businesses, signal a “robust recovery,” PayNet President William Phelan told Reuters.
“These small businesses are people who see the demand in the economy every day, and they are alert to react very quickly to that demand,” he said, also telling Reuters that businesses typically use the loans PayNet tracks to buy new equipment and then likely hire workers to operate it.
Phelan’s outlook on the economy has changed drastically since July when the index rose only 2 percent and BusinessNewsDaily reported him saying businesses don’t want to take out loans and “we’ve stalled or are stalling as an economy.
In August, that weak demand turned around: The index rose 15 percent from a year earlier.
The Thomson Reuters/PayNet small business lending index is correlated to developments in the overall economy, with changes in the index preceding changes in the overall U.S. economy by two to five months.
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