Small business lending in the United States showed slight signs of growth during the month of February, with a 2 percent year-on-year increase, according to the Thomson Reuters/PayNet Small Business Lending Index. It’s the first time small business financing has risen since fourth quarter 2010.
The Small Business Lending Index measures overall statistical data regarding U.S. small business financing, and usually correlates with overall economic growth up to a couple of quarters into the future.
Despite the index’s small increase, the percentage rate is relatively low, which may negate some of the perceived growth. The sum of outstanding small business loans at the end of February amounted to about $586 billion, which is only a $2 million climb from the third quarter’s $584 billion in outstanding loans, according to the U.S. government’s Federal Deposit Insurance Corporation (FDIC).
The Richmond Times-Dispatch reports that the survey results show many smaller employers are still feeling tentative about borrowing funds as the slow growth is indicative of small business owners’ financial constraints and reservations about current economic health.
The U.S. Federal Reserve tried to buffer this by decreasing long-term borrowing costs last September with a third round of asset purchases, Reuters reports. However, the move did not seem to improve demand.
A small business that is in need of financing options can contact National Funding, a leader in the industry, to consult on what is needed for them to take out a small business loan.