It’s no secret that small businesses have a huge effect on the U.S. economy, because if they struggle, many others struggle, too. But apparently the owners of such companies are faring well so far this year, as the Thomson Reuters/PayNet Small Business Lending Index showed that they borrowed 4 percent more in January 2014 than they did last year.
The increase was relatively small, but historically, a hike now likely will mean strong U.S. economic growth in the second or third quarter of 2014, Reuters reported. The growth is amid a massive cold spell that is touching many parts of the country, leaving experts to forecast a healthy market this year.
“It was unexciting growth but it was growth nonetheless,” PayNet founder Bill Phelan said to Reuters.
Small business owners who want to secure more business capital for future growth may benefit from seeking out nontraditional lenders due to ease of access and more flexible terms. These lenders often make it easier for small businesses to focus on growth instead of fretting about strict loan terms.
The year ahead
The Thomson Reuters/PayNet Small Business Lending Index also revealed growth trends in other areas of the economy that had been crippled by multiple polar vortices – consumer sentiment and factory output from the Midwest. Other measures like retail sales and hiring have struggled a bit in recent weeks, but if businesses keep growing, it should be enough to push the economy forward.
The country’s economy grew at a 2.4 percent annual pace in the fourth quarter of 2013, Reuters reported, which is slower than years past, but is expected to pick up in the future. Another PayNet report showed loan delinquencies have dropped to near-record lows, showing borrowers have more resources to pay to grow.
