Small Business Borrowing Eases in November, Survey Says

Category: Small Business Borrowing Published: Thursday, 15 January 2015 Written by Admin

Small businesses slowed their borrowing in November following two months of strong growth, Thomson Reuters and PayNet said Tuesday. The two companies Small Business Lending Index dropped 11 percent to 116 from Octobers 129.7. The October reading was revised downward from 131.8. The index is compiled from PayNets database; the company compiles credit ratings on small businesses.

No surprise

The dip in borrowing levels was not unexpected after the lending index rose 2 percent in October and 7 percent in September, PayNet President William Phelan said. The November reading was up 1 percent from a year earlier, so the long-term upward trend of borrowing is intact.

The slower pace likely reflects companies overall conservative attitude toward borrowing. Many held off taking on debt following the recession, waiting for their sales and the economy to show clear signs of strength. Their increased borrowing during 2014 dovetailed with a gradual increase in hiring. More companies took out loans so they could expand, and that growth included taking on new employees.

Look ahead

This week brings several readings on whether small businesses were confident enough to increase their hiring at the end of the year. Software maker Intuit, payroll company ADP and the advocacy group National Federation of Independent Business release their reports on small business employment. And the Labor Department issues its December report. Although it wont break down hiring by company size, it will give an indication of what small businesses did last month.

--Associated Press

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