Borrowing by small U.S. businesses rose at a record pace in May, data released by PayNet Inc on Thursday showed, a sign that economic growth is poised to pick up in coming months.The Thomson Reuters/PayNet Small Business Lending Index, which measures the overall volume of financing to U.S. small businesses, rose 26 percent in May from a year earlier, PayNet said.
The index is now at its highest since July 2008, two months before the collapse of Lehman Brothers and the near derailment of the world financial system.
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"If small businesses are taking these kind of chances, taking risks, making long term investments, they are seeing some long-term opportunities on the horizon," PayNet founder Bill Phelan said in an interview. "That's got to be a big positive sign for the economy."
Separate data also released on Thursday showed small business loan defaults at their lowest in five years, tying records set in April and May 2006.
Accounts in moderate delinquency, or those behind by 30 days or more, fell in May to 1.95 percent from 2.06 percent in April, PayNet said on Thursday.
Accounts 90 days or more behind in payment, or in severe delinquency, fell to 0.59 percent in May from 0.63 percent in April.
I have never heard of Paynet, but thought this was an interesting development in light of recent news.
6 comments:
"PayNet"... Sounds frighteningly like "SkyNet" from the Terminator movies to me. Heh.
The machines are taking over ....
ABC News reported that foreigners are beginning to open up businesses in the United States. The economy may have hit bottom provided that the government does not default on its debt.
On the other hand, we've seen more bad economic news this week. Consumer spending was flat in May and for the 12th week in a row new claims for unemployment were above 400,000. There is a high probability that the economy contracted in June and possibly even in May. If these numbers don't improve, we could be in a recession a few months from now.
easong, I dont know. The data is no doubt much weaker than it needs to be, but I dont get the sense of an overall contraction in June. The manufacturing numbers from the Philly Fed and Empire State were horrible, but Chicago PMI was good. Jobless claims are no doubt high, but have fallen from where they were a month to month and half ago. There is still more data to come for June, but I dont think there was a contraction.
Anonymous:
Consumper spending adjusted for inflation dropped .1% in May. That accounts for about 2/3 of GDP. There is also no question that government spending is sharply being reduced and that net exports are negative. Since GDP = C + I + G + NEX, the only way GDP grew was if investment spending sharply rose. I see little chance that happened. I see a good chance that we've experienced negative economic growth during the past month. However, since the economic growth was still positive in April, its hard to say if growth was negative for the second quarter.
Thanks For Sharing.....
A Small Business Just Starts Within inside the single Room also.
I mean no much more Space and Employees needed.....
So A Single Person Easily handles Small Business
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