The latest data release of the Thomson Reuters/PayNet Small Business Lending Index (SBLI) shows small business investment activity has not been frozen and the financial status of small businesses is healthy. The SBLI registered 117.2 in January, a 4% increase over last year. The Index decreased 4% compared to December, which was revised slightly from 121.5 to 122.5. However, December is usually strong as companies spend budgeted money before the year ends.
The Thomson Reuters/PayNet Small Business Delinquency Index (SBDI) decreased 1 bp to 1.16% in January 2014 for loans 31-90 days past due. As compared to one year ago, delinquency is down 12% (15 bps).
“Based on this latest data release the growth of the economy in the next 2 to 5 months will begin to heat up as asset forming investments encourage other add-on spending. January investment is especially promising in light of other weak financial releases in January, like the slowdown in manufacturing. Had small businesses not been as active, economic releases would have been even weaker in January,” says William Phelan, president of PayNet.
This latest data release takes the pulse of the U.S. small business economy and adds another steady month of expansion at low credit risk for small businesses. Small businesses are reacting to some demand for their goods and services by keeping their factories and tools in good working order and investing in more.