Paynet: Lending continues to surge

1/5/2012

The Thomson Reuters/PayNet Small Business Lending Index was up again in November, showing an 18 percent increase year-over-year, Reuters reports.

Overall small business lending was up 10.2 points to 106.4 - its highest level since February 2008.

"We are entering a new phase of the business cycle," PayNet founder Bill Phelan told the news source. "Businesses are betting on the future with increased investment spending."

Rohit Arora, chief executive of small business lending broker Biz2Credit, added that demand for loans to smaller firms is on the rise because of the slowly improving economy - better sales and more creditworthy businesses means more banks will open their purse strings, The Wall Street Journal reports.

Delinquent accounts continued to decline. Those in moderate delinquency (behind 30 days or more) dropped five basis points to 1.50 percent in November. Severe delinquents (90 days or more) fell one basis point to 0.39. Defaulters (180 days or more) decreased six basis points to 0.58 percent.

The financial crisis in Europe still has many tempering expectations for 2012, but the economy has gathered enough momentum over the past three months for banks to remain optimistic, Reuters adds.