These days, the improving economy has been able to help many small businesses to better realize their success and position them for future growth, but in a lot of cases, higher sales numbers alone aren’t enough to assist owners in achieving their goals. As such, more are now turning to lenders once again to help them in this regard.
In the final month of 2013, the amount of borrowing completed by small businesses nationwide rose to a level of 121.6, up from 114.6 a month earlier, according to the latest Thomson Reuters/PayNet Small Business Lending Index. That’s up 5 percent on an annual basis, and the level now stands at the highest point observed since March 2007. The most recent rating of 121.6 is on a scale with a baseline of 100 set to be equal to the rate seen in January 2005, well before the onset of the recession, and may indicate that further growth is in the offing for at least the next few months, simply due to how sustainably strong the most recent upticks have been.
“We are fairly optimistic there will be some growth coming at least from the small business portion of the economy,” PayNet founder Bill Phelan said. [The rate of growth is] not too frothy, and not too tepid either.”
Loan delinquencies may be more troubling
Meanwhile, the improving financial situations for many small businesses nationwide has not necessarily led them to become more current as a group on their outstanding loans, the report said. Delinquencies of between 31 and 180 days actually rose very slightly to 1.47 percent of all outstanding balances, from the previous month’s 1.46 percent. However, this remains in the neighborhood of the all-time low for this index set in October, when it was at 1.44 percent. It’s also down from the all-time high – seen in August 2009 – of 4.73 percent overall.
Small business owners hoping to improve their companies’ situations might want to start by looking inward and trying to find ways in which they can trim the fat from their budgets. This might include shopping around for small business insurance that’s more affordable than their current coverage. For instance, finding lower prices for errors and omissions insurance can help companies to save thousands of dollars or more over the course of just one year.