Commercial borrowing by small- and medium-sized businesses in Canada declined for the third straight quarter, a PayNet latest data release shows.
PayNet, which tracks commercial financing for millions of small- and medium-sized businesses in North America, said its Canadian Business Lending Index slipped 2% in the third quarter to 209 from 213 in the second quarter. Compared to a year earlier, the level of borrowing was flat.
“There’s a definite trend toward less borrowing and less business investment,” said Bill Phelan, president of PayNet. “It’s really a pause, we think, rather than a sea change.”
After strong growth following the global credit crisis, borrowing peaked in the fourth quarter of last year and has waned steadily since. As economic growth in the U.S. starts to kick in, Canada should see some benefit, which should boost business borrowing, Phelan said.
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