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Small business lending rises

Small business lending rises

Small business borrowing showed a 12 percent year over year increase in April, according to the Thomson Reuters/PayNet Small Business Lending Index.

The index actually fell 0.6 percent compared with last month to finish at 78.4, but still showed steady improvement compared with numbers from the recession.

Reuters says the index also found that fewer companies were falling behind on their existing loans. Accounts in moderate deficiency fell by more than 25 percent compared with figures from May.

“Small businesses are getting their financial house in order,” Bill Phelan, PayNet’s president and founder, told Reuters.

Analysts say that the slight decline of the index shows that financing is available through various banks, even if small business owners have been hesitant to expand. That means that entrepreneurs interested in forming a company may find that banks and other investors are increasingly willing to lend.

With the increase in small business borrowing, SMBs have also created additional jobs. A recent Intuit study found that small businesses generated roughly 25,000 new jobs in May, and they have added 240,000 new jobs since October 2009.