The August 2017 Thomson Reuters/PayNet Small Business Lending Index (SBLI) increased 8% to 134.2 in August 2017 from 123.8 in July 2017. Compared to August 2016, the SBLI increased 1%.

Top growth sectors driving investment expansion by small businesses were construction (5.6%) and accommodation and food services (5.9%) businesses which together represent more than 13% of the small business economy. Arts, entertainment and recreation (10.0%) remains the top growing sector among small businesses. In a big turnaround, mining (3.2%) and wholesale trade (+3.0%) are now both positive for the first time in the last several years.

“Small business originations growth and delinquency continue to show a mixed bag,” said William Phelan, president of PayNet.

After many months of double-digit contractions, growth in the healthcare sector has stabilized dramatically, and has been slightly positive in recent months with a 0.2% increase.

The Thomson Reuters/PayNet Small Business Delinquency Index (SBDI) 31-90 days past due decreased to 1.33% in August 2017 from 1.35% in July 2017. Compared to one year ago, delinquency increased by one basis point.
Transportation showed a 10-point decrease in delinquency. Increases in delinquency are shown in both agriculture (two points) and construction (one point).

The PayNet Small Business Default Index (SBDFI) at 1.84% is 35% below pre-crisis readings, and has been receding in recent months. Much of the improvement in recent months has come from two formerly high-risk sectors experiencing improvements in default rates. Mining default rates have declined close to one percentage point over the last year, and transportation default rates have been declining at a 0.6% annualized rate over the last three months.

“Conditions are in place for small businesses to drive GDP growth resulting from exceptional financial health,” Phelan said.