Over the past few years or more, many small business owners across the country have learned the hard way that it’s not easy to come across lending for their companies. However, it should be noted that things have been a little more robust lately, to the point that owners themselves seem to be taking a step back from these borrowing efforts.
In all, the Small Business Lending Index came in at a reading of 114.5 in August, down 10 percent from July’s level of 127.5, according to the latest data from Thomson Reuters and PayNet. That latest number was also down 1 percent on an annual basis.
“This release is not a surprise given the strong growth in investment by small businesses over the past several months,” states William Phelan, president of PayNet. “Keeping up a double-digit investment rate could actually compromise the expansion phase of this business cycle. At face value, this report appears to be a setback for small business and the economy. Although we don’t know if this is the start of a correction, the data tells us small businesses are making measured investment. This measured investment with low credit risk helps extend the low risk expansion phase of this business cycle.”
Delinquency rises, but remains extremely healthy
Meanwhile, it also seems as though many small business owners are keeping their feet under themselves financially, even as the level of delinquency on small business loans increased for the fourth straight month, the report said. In all, only 1.27 percent of small business loans were between 31 and 90 days past due, rising from July’s level of 1.25 percent. Further, that marked a 9 percent increase from August 2013’s 1.16 percent reading.
More serious delinquency increased as well, the report said. Small business loans that were between 91 and 180 days past due ticked upward to 0.31 percent, and on an annual basis it similarly marked the fourth straight month of increases. This portion of the lending segment was likewise up 9 percent from the levels seen in August 2013.
Owners who want to position their companies to best handle the various aspects of keeping up with all their bills might want to consider the ways in which cutting small business insurance costs can help them do so. For instance, if they can find more affordable consultant insurance, they could end up saving thousands of dollars annually.