Lending to small business edged up in the month of December, marking the fifth straight month that borrowing by small businesses increased, according to the latest Thomson Reuters/PayNet Small Business Lending Index released on Tuesday.
Lenders lent about 20 percent more to small businesses in December 2010 compared to November, the index said.
The data is an auspicious indication for the country’s economic future, as small business has been a significant engine to the US’s economy.
The Thomson Reuters/PayNet Small Business Lending Index, which measures total volume of small business financing, reached its highest point since July 2008, and the highest month-to-month increase since March 2006.
Small businesses “are borrowing more and they are finding it easier to pay their bills,“ William Phelan, PayNet Inc. president and founder, told Reuters. ”The recovery is growing and remains on a solid footing.”
New hiring by small businesses accounts for 80 percent of new employment, according to Reuters. But the increase in loans to small businesses may not necessarily result in new jobs, as the index found that businesses were using the money to fix and replace out-of-date machines.
“I don’t think we are ready to declare victory quite yet,” Phelan told Reuters, noting that the small business loans index still falls short of its pre-recession levels in 2005.
Lenders lent about 20 percent more to small businesses in December 2010 compared to November, the index said.
The data is an auspicious indication for the country’s economic future, as small business has been a significant engine to the US’s economy.
The Thomson Reuters/PayNet Small Business Lending Index, which measures total volume of small business financing, reached its highest point since July 2008, and the highest month-to-month increase since March 2006.
Small businesses “are borrowing more and they are finding it easier to pay their bills,“ William Phelan, PayNet Inc. president and founder, told Reuters. ”The recovery is growing and remains on a solid footing.”
New hiring by small businesses accounts for 80 percent of new employment, according to Reuters. But the increase in loans to small businesses may not necessarily result in new jobs, as the index found that businesses were using the money to fix and replace out-of-date machines.
“I don’t think we are ready to declare victory quite yet,” Phelan told Reuters, noting that the small business loans index still falls short of its pre-recession levels in 2005.
