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U.S. small business borrowing falls in March: PayNet

Published 05/04/2016, 05:02 AM
Updated 05/04/2016, 05:10 AM
© Reuters.  U.S. small business borrowing falls in March: PayNet

By Ann Saphir

(Reuters) - U.S. small business borrowing fell in March, data released on Wednesday showed, pointing to slimming prospects of stronger economic growth ahead.

The Thomson Reuters/PayNet Small Business Lending Index fell to 135.3, down from February's upwardly revised 138.9 and marking the index's sixth decline in the last nine months. The PayNet index typically corresponds to U.S. gross domestic product growth one or two quarters ahead.

"There's no bullish sentiment," said Bill Phelan, president of PayNet, adding that 11 of the 18 sectors PayNet tracks are on a downward trend. Small business owners, he said, are simply not willing to spend big in hopes of growth.

"If we go out on the risk-taking limb, the branch might get sawed off," Phelan said of the thinking among small businesses today. "Now is not the time to play hero."

Small business borrowing is a key barometer of growth because little firms tend to do much of the hiring that drives economic gains.

Loans more than 30 days past due rose slightly in March to 1.48 percent, from 1.47 percent in February, separate data from PayNet showed.

PayNet collects real-time loan information such as originations and delinquencies from more than 325 leading U.S. lenders.

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