If you joined the queue at your local bank at the end of last year to secure a loan for your small business, you were in good company. Borrowing by small businesses jumped in November to the highest level in more than two years, according to a new small business lending index. It’s a sign, experts say, that the small business recovery is underway.
The overall volume of financing to U.S. small businesses rose 12 percent in November, as measured by the Thompson Reuters/PayNet Small Business Lending Index, which gauges the loans, leases and lines of credit that small businesses originate to finance investments in their operations.
This was the fourth straight double-digit jump and the ninth consecutive monthly increase in the index, Pay Net said.
“This provides definitive proof that the small business economy is continuing to grow and recover, Bill Phelan, PayNet’s president, told Reuters. “Everywhere you look at the index, it’s very, very positive.”
Equally encouraging, said PayNet, fewer companies are falling behind on payments on existing loans.
“Non-current balances continue to decline,” Phelan said. “So asset quality for lenders is continuing to improve, too.”
Improvement is likely to increase investor confidence in small business this year, Phelan said, which would create a virtuous cycle that would funnel more money into the small business sector, which is the engine powering most of the new hiring in this country.
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Reach BusinessNewsDaily senior writer Ned Smith at email@example.com. Follow him on Twitter @nedbsmith.