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Small Business Borrowing Is on the Rise

As small companies take out loans to purchase new tools, factories, and equipment, experts are citing an era of growth.


It looks like FICO's positive forecast for small business lending was spot-on after all. 

For a second month in May, small businesses ramped up their borrowing, signalling growth for an economy still reeling from the recession, Reuters reports

The Thomson Reuters/PayNet Small Business Lending Index, which measures the number of loans made to small U.S. companies, rose to 115.1 from 108.1, a number revised in April that was originally 110.5.  Over the past year, the index has climbed 9 percent, PayNet said Tuesday.   

The increase in lending may point to additional hiring among small businesses, which is a good thing, PayNet president Bill Phelan told Reuters in an interview.

The Thomson Reuters/PayNet Small Business Delinquency Index also revealed those companies are paying back their loans on time. Delinquencies of 31 to 180 days dropped to a record low -- 1.46 percent of all loans made in May from 1.54 percent in April. 

IMAGE: brookward/Flickr
Last updated: Jul 2, 2013

JANA KASPERKEVIC is a graduate of Baruch College, City University of New York, where she earned a bachelors degree in Journalism and Political Science. She covers start-ups, small businesses, and entrepreneurship for Inc. Her work has appeared in The Village Voice, InvestmentNews, Business Insider, and Houston Chronicle, among others. She lives in Brooklyn.

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