The Small Business Lending Index reflected a growth in small business lending that suggests further improvements in the economy.
Small business borrowing reached 117.2 on the index in January, outpacing borrowing in January 2013 by four percent despite falling from December’s numbers and reports of slowed business due to a series of winter storms.
Increases in the Small Business Lending Index have generally been tied to similar growth in the economy in following quarters. In addition, a higher number of loans could mean that small businesses are positioning themselves to increase hiring or otherwise ramp up their workloads in the near future.
One contributing factor to the increase in small business loans is the State Small Business Credit Initiative, a program in place since 2010 that plans to disburse $80 million in earmarked funds to small business owners. Nearly 90 percent of those funds have been distributed, most of them to small business owners in Michigan.
Even better news for small business owners is the dip in loan delinquencies between one and six months, which currently sit 0.01 percent higher than October 2013’s record low of 1.44 percent. Lower delinquency suggests that small business activity is generating enough revenue to pay off small business loans in time – an even greater indicator of continuing growth.
Despite these encouraging numbers, it is still difficult for a number of companies to qualify for small business loans through traditional channels. If your small business needs an infusion of cash but you fail to meet the strict criteria for a bank loan, Accounts Receivable Cash can help! Learn more about our invoice factoring programs for small business then contact us to receive a competitive, same-day quote!