July 10, 2017

Main Street Monday — Small Business Delinquency Index up 10 Basis Points

By Bob Coleman
Editor, Main Street Monday

A barometer of small companies’ financial health suggested companies are finding it easier to pay off old loans. The share of loans more than 30 days past due was 1.69 percent in May, down from a month earlier, PayNet data showed.

To put that into context, check out this chart:

Borrowing by small U.S. firms hit its highest level in nearly a year, data showed on Thursday, suggesting businesses are ramping up investments to meet customer demand.

The Thomson Reuters/PayNet Small Business Lending Index for May rose to 137, its highest since June 2016, from an upwardly revised April reading of 125.4.

The increase was driven by an 11 percent year-on-year rise in borrowing by businesses in arts and entertainment. Transportation and healthcare companies slashed borrowing, however, by 14 percent and 13 percent respectively.

The rise in the index “is not enough to say ‘we’re off to the races,'” says Bill Phelan, PayNet’s chief executive and founder. But at least “we’re not going into contraction mode,” he added.