Small business lending grows year-over-year in January but remains sluggish

3/31/2011

While small business lending grew year-over-year in January, according to a new survey conducted by PayNet, it declined month-over-month compared to December, Reuters reports.

This was somewhat expected as businesses settle down after the busy holiday months, however, it still shows that the economic recession is far from over. William Phelan, PayNet's president and founder, told Reuters that companies won't return to pre-recession borrowing levels for another two years if the recovery continues at this pace.

"Small businesses are not coming out of the gate aggressively in 2011," Phelan told Reuters. "We are calling it the long-haul recovery."

Because small businesses account for the majority of new jobs, it is especially vital that they begin spending more to accelerate the recovery of the economy. President Barack Obama and his administration are implementing a number of new plans to better support small business owners, such as providing tax credits, devoting more money to loans and launching new programs.