August 9, 2017
By Bob Coleman
Editor, C-Suite Wednesday
C-Suite Wednesday — US Small Business Health Continues to Improve
Loans to US small businesses hit a nearly two-year high in June, driven by restaurants, hotels and contractors.
Still, measured from a year earlier, borrowing was flat.
“June marked another month of weak small business investment and declining delinquency rates,” says BIll Phelan, president of PayNet. “Policy uncertainty is leading to economic uncertainty which is becoming the new norm for private businesses that are taking less chances.”
Sectors of the economy that dragged growth down during 2015 and 2016 are starting to see improvements in growth; especially prevalent Mining.
Other sectors are exhibiting no evidence of strength with Healthcare (-13%), Finance (-4%) and Transportation (-13%).
Small business financial health improved marginally. The Thomson Reuters/PayNet Small Business Delinquency Index 31-90 days past due decreased to 1.32% in June 2017, down from 1.34% in May 2017.
Compared to one year ago, delinquency increased 4%.
Small business default trends continue to improve. The PayNet Small Business Default Index increased just 16 basis points since June 2016 to 1.86%, but remains 34% below 2005-06 averages.
“Private companies are learning to live with the uncertainty,” Phelan added. “The result is that investment will remain tepid, financial health strong and defaults below average.”