The December release of the Thomson Reuters/PayNet Small Business Lending Index (SBLI), which is a leading economic indicator of GDP, increased 6% to 129.8 compared to 122.6 in December 2013. This reflects a 10% increase from 117.6 in November 2014, providing further evidence to support a growing U.S. economy in 2015.

At 129.8, SBLI stands near its all-time high of 132.0, which was reached in October 2014, after restatement upwards in this report. Trend-line growth, although slightly lower than last month, continued at a healthy 7% over the prior year representing organic expansion above the normal replacement levels for business equipment.

“Investment in new property, plant, equipment and businesses is moderating slightly but remains on a healthy path. These investments mean organic growth is underway for small businesses,” states William Phelan, president of PayNet. “When we look at sectors, it is driven by consumer based business – Transportation, Food & Accommodation, Retail Stores, and Construction.”

Financial health of small businesses actually improved slightly. The Thomson Reuters/PayNet Small Business Delinquency Index (SBDI) 31-90 days past due decreased 1 basis point to 1.24% in December compared to November while these payments in arrears are up just 6 basis points compared to a year ago. Strong financial health is also shown by the low severe past dues. The SBDI 91-180 days past due remained flat at 0.30% from November to December.

“Domestic expansion is further confirmed by this month’s small business credit trends. This is a good sign given the slowing overseas markets and stronger U.S. dollar which will hold back exports,” states William Phelan. “This report signals a business cycle continuing to expand and shows financial risks remain low.”