Rate of borrowing up for small businesses

Over the course of the past few years businesses throughout the country have had a difficult time surviving. This is particularly true where small businesses are concerned. While larger operations often have multiple areas in which excesses can be trimmed, it is not uncommon for smaller businesses to be surviving on a shoestring. Things appear to be looking up for the smaller firms throughout the nation however.

Small businesses throughout the nation, including Chicago, appear to be gaining confidence in the economy. This is illustrated in the statistics surrounding the borrowing habits of these businesses. According to the Thomson Reuters/PayNet Small Business Lending Index, the overall financing of companies in the United States rose over 10 points between September and October, from a revised 96.4 in September, to 107.5 in October. Compared to October 2011, the rate of borrowing is up a total of 11 percent for small businesses.

This is not the only positive indicator regarding the health of businesses in the U.S. PayNet also reports that the number of accounts that were at least 180 overdue was down to 0.29 percent. In September, it had been at 0.32 percent. Those that were 30 days overdue were at 1.2 percent, well below the "normal" delinquency rate of 1.5 to 1.6 percent.

The founder of PayNet believes the positive changes are due to optimism on the part of smaller businesses.

This current borrowing information could serve as encouragement for those who are contemplating starting their own closely held business in Chicago. What are your thoughts on this? Do you think this is a good time?

Source: Reuters, "Small-business borrowing surges in October," Ann Saphir, Dec. 3, 2012

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