The widely followed and highly regarded Thomson Reuters/Paynet Index supports the view that the economy is back to normal, at least in terms of small business lending activity.
Sunovis Financial, explains, “Small businesses have been hungry for external funds all year, because as the economy grows and unemployment contracts these businesses are actively positioning themselves to take full advantage of the recovery and improved business environment.”— A major economic indicator is signaling that lending activity in the small business sector is brisk and is basically back to pre-recession levels. As Meghan Robinson, CEO of
The Thomson Reuters/PayNet Small Business Lending Index measures the volume of new commercial loans and leases to small businesses, as serves as a leading indicator of the overall U.S. economy. Using the index data, economists can often predict where the economy is headed over the next two to five months. Currently, the index shows that lending activity is approximately on par with where it was in the middle of 2006, which was about a year before the credit crisis and housing market crash. The year-over-year results between now and this time last year, however, are roughly the same – following a noticeable spike in activity of close to 10% at the beginning of 2014.
“The takeaway from these new numbers is that the small business community, which is the engine of the nation’s economy, is in a period of significant expansion,” says Robinson. “I also believe that the data is telling us that while existing businesses are growing, new small businesses are being launched – adding to the volume of loan originations. As more businesses open, that also helps to drive down the nagging unemployment that has plagued the country.”
To create the index, PayNet tracks new borrowing activity by millions of American businesses and screens the data to ensure that it reflects new loan originations. The borrowing companies that are included in the data must have total outstanding loans and leases of less than $1 million during the month being calculated by the index.
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Release ID: 70414