The June data release of the Thomson Reuters/PayNet Small Business Lending Index (SBLI), which is an economic indicator of GDP, increased 9% from 131.0 in May 2015 to 143.3 in June 2015, reaching a new high. When compared to the same month one year ago, the SBLI is up 19%.
“The small business economy is leading the charge for growth within an overall economic environment of slow progress that has defined the current expansion,” states William Phelan, president of PayNet. “Strong financial health means small businesses will find easier access to credit and more of them will find borrowing needs met” Phelan added.
Businesses in Transportation (+25.7%), Construction (+13.8%) and Accommodation and Food Services (+15.6%) sectors showed the highest growth, while Agriculture (-14.8%), Mining (-5.2%) and Wholesale (-1.2%) sectors lagged behind the national trend. A recent PayNet study shows improved credit markets could boost GDP upwards toward 3%.
The Thomson Reuters/PayNet Small Business Delinquency Index (SBDI) 31-90 days past due decreased two basis points from 1.24% in May 2015 to 1.22% in June 2015. As compared to one year ago, delinquency is flat; this is the first month since May 2014 that delinquency was not up year-over-year.
States that were lagging during the recession have shown a big uptick in borrowing, including Florida (+11.5%), Pennsylvania (+9.3%) and California (+8.8%).
“This latest data release shows the private small business sector accelerating, which is a big positive as the U.S. economy evolves,” Phelan added.
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