Lending to small business in the United States barely grew in February, supporting the view that economic growth was lackluster at the start of the year.
The Thomson Reuters/PayNet Small Business Lending Index, which measures the overall volume of financing to U.S. small businesses, edged up to 98.3 in February from 98.2 a month earlier.
Borrowing rose 14 % from a year earlier, the lowest 12-month growth rate since September.
PayNet founder Bill Phelan said “It’s pretty uninspired,”, and he added “We see this faltering as a sign that there’s caution on the part of small business owners.”
Economists forecast U.S. economic growth slowed in the first quarter to around 2 to 2.5 %, down from a 3 % annual rate in the previous quarter.
Federal Reserve Chairman Ben Bernanke said last month growth needs to accelerate to bring down the country’s 8.3 % jobless rate.
The December and January readings for PayNet’s lending index were both revised downward.
PayNet index tracks borrowing by millions of small U.S. businesses, and the index is correlated with changes in U.S. gross domestic product a quarter or two in the future.
Separate PayNet data suggested small businesses are paying back their debts with relative ease.
Accounts in moderate delinquency, or those behind by 30 days or more, fell to 1.46 % in February, from 1.54 % in January. That’s far below the high of 4.42 % reached in May 2009.
Accounts 90 days or more behind in payments, or in severe delinquency, fell to 0.35 % in February, a record low, from 0.38 % in January.
Accounts behind 180 days or more, or in default and unlikely ever to be paid, fell to 0.50 % in February, from 0.52 % in January, as Reuters stated.
PayNet collects real-time loan information, such as originations and delinquencies, from more than 250 leading U.S. capital equipment lenders.