Small businesses took out fewer loans and leases for the second straight month in February, according to a report by Thomson Reuters and PayNet. The two companies' Small Business Lending Index fell to 119.2 from January's upwardly revised 122.4. The index was 133.4 in December. It is compiled from PayNet's database; the company issues credit ratings on small businesses.
WHAT'S GOING ON?: The harsh winter weather that continued in February likely was a factor in the borrowing slowdown, hampering activity at many companies. That would repeat the pattern of the winter of 2014, when heavy snow and ice stopped many businesses from working. The economy shrank at an annual rate of nearly 3 percent during the first quarter last year.
The drop in borrowing this year may also reflect small business owners' caution. They have said in surveys they wouldn't borrow, hire or expand unless they believed their companies' revenue would justify taking on more risk. The Thomson Reuters/PayNet report is in line with reports showing small business hiring in February was less robust than in previous months.
MORE REPORTS DUE OUT: Several reports on small business hiring in March are expected this week, from software maker Intuit, payroll provider ADP and the National Federation of Independent Business. The Labor Department also releases its monthly employment report.