In the last several months at least, small business owners across the country have likely found positive conditions for their companies overall, but one area in which there might have been more significant improvement was through their access to credit that might help them to expand. That trend certainly seems to have continued in the month of May, as lending continued to increase to firms of this size in particular.
For the third month in a row, the Small Business Lending Index from Thomson Reuters and PayNet ticked upward, rising to a level of 127.1 from April's 125.4 rating, the companies announced. This is the highest level observed since March 2007, before the effects of the economic downturn began to really take hold, and also the third-highest level ever recorded by the index. Moreover, it seems that this kind of success for many companies seeking financing these days is only going to increase in the near term at the very least.
"I think it would be hard to change the momentum here anytime soon," Phelan said.
Companies also getting better at paying their bills
In addition to the fact that lenders continued to open their checkbooks for small businesses in particular, it seems that more companies were also starting to reduce their delinquency on that type of financing, the report said. Companies that were between 31 and 180 days behind on their loan payments slipped to just 1.48 percent of all outstanding balances, just four basis points above the all-time low set in October 2013. That number was also down from the all-time high of 4.73 percent observed in August 2009, when the recession was really just starting to come to an end.
Of course, when it comes to being able to qualify for financing, it's not always easy for small business owners to adequately prepare themselves in short periods of time. As such, they might want to make sure that they're doing all in their power to make sure they're as attractive to lenders as possible. That could include taking the time to reduce their expenses and streamline their businesses overall, including finding more affordable small business insurance coverage. By cutting costs for liability insurance, they might be able to save thousands of dollars per year which, in turn, could then be put toward other aspects of their companies.