PayNet index doesn't foreshadow double dip

12/1/2011

Small business lending grew and delinquencies dropped in October according to the Thomson Reuters/PayNet Small Business Lending Index. However, borrowing has yet to reach pre-recession levels.

Lending rose 20 percent in October, marking the 15th straight month in which borrowing has seen double-digit increases.

October proved to be a more successful month than September, when lending rose by 12 percent. However, the overall index sits at 98.1, below the healthy level of 100 seen in 2005.

"It's not showing tremendous strength," said PayNet founder Bill Phelan. "But certainly this shows we are not headed for a double dip."

A double-dip recession would create additional asset quality issues for the banking industry, Boston Business Journal notes.

Account delinquencies for those 90 days behind payment fell once again in October, reaching a record low of 0.38, compared to 0.41 percent in September. Moderate delinquencies (30 days behind) also dropped, from 1.60 percent to 1.51 percent, while defaulters (180 days behind) dropped from 0.65 percent to 0.64 percent during the same time period.