Smart Borrower Blog

Small Business Lending Increasing

Nov 1st, 2010 @ 4:07 PM by Debbie Dragon

According to new data from ThompsonReuters/PayNet, small business lending is on the rise. During the month of September lending was up 16% from last year at the same time. Additionally, these new figures put lending at the highest level seen in the last two years.

The big question is whether or not these loans will help give the economy a boost. PayNet’s president and founder William Phelean, believes it will. “This doesn’t point to anything but a robust recovery,” said Phelan in an interview. “These small businesses are people who see the demand in the economy every day, and they are alert to react very quickly to that demand.”

Other promising loan data was also released this week by PayNet. The data showed that companies who have current loans are falling behind less than in the recent past. Those with loans 30 days late dropped from 2.81% in August to 2.65% in September while those with loans 90 days past due dropped from .85% in August to .77% in September. Finally, even those 180 days overdue dropped from .84% in August to .76% in September. This news is great for small businesses looking to borrow money in the future, as lenders will become more confident with fewer delinquencies and have more funds at hand to loan out.

Others are saying not so fast. While PayNet does collect real time loan data information from over 200 lenders from throughout the US, they track small business loans that are used mainly to buy new equipment. Therefore, the money is not directly being used to hire new employees. While eventually many of these companies might look to hire people to run the equipment, the question is when?

Currently unemployment across the country remains close to 10%, meaning one in ten individuals is currently out of work. Even though small businesses are considered one of the critical components in new job creation accounting for up to 80% of new employment, many business owners are not in a position to hire. Statistics from a recent survey conducted by The National Federation of Independent Business found that a high number of small businesses have no plans to hire in the near future and many of them plan to actually cut employees over the next few months.

About Debbie Dragon
Debbie Dragon is a full time freelance writer and the co-owner of

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