(Reuters) - U.S. small businesses
borrowed more money in January than they did a year earlier, signaling
continued growth in the economy despite a spate of cold weather that has
been blamed for weakness in many other indicators of activity.
The Thomson
Reuters/PayNet Small Business Lending Index, which measures the volume
of financing to small companies, rose to 117.2 in January, up 4 percent
from a year earlier, PayNet said on Monday. The index was down from a
nearly seven-year high in December, typically a strong month for
borrowing as companies round out their budgets for the year.
A rise in the index is historically correlated with stronger U.S. economic growth a quarter or two in the future.
"It was unexciting growth but it was growth nonetheless," PayNet founder Bill Phelan said.
Small
companies typically take out loans to buy new tools, factories and
equipment, so more borrowing can be an early signal of increased hiring
ahead.
The report added to
signs of a thaw in an economy whose growth has been chilled by unusually
harsh winter weather. Frigid temperatures hurt retail sales, industrial
production, home sales and hiring early this year, though other data
released late last week, including consumer sentiment and factory output
in the U.S. Midwest, showed a bit of strengthening.
The
signs of improvement may be welcome news for the Federal Reserve, whose
new chair Janet Yellen plans to end the central bank's massive
bond-buying entirely before the year is out unless the economy fails to
improve as expected.
A separate index released by PayNet on Monday showed loan delinquencies ticking down marginally toward near-record lows.
A
measure of accounts overdue as a percentage of all loans hit a high of
4.73 percent in August 2009. The record low was 1.44 percent last
October.
PayNet collects real-time loan information such as origination's and delinquencies from more than 250 leading U.S. lenders. For more information on small business lending, please visit magiccitycapital.com.
(Reporting by Ann Saphir in San Francisco; Editing by Leslie Adler)