US Small Business Borrowing on the Rise

Small U.S. businesses increased borrowing for a second month in May, pointing to growth ahead for an economy still struggling to pull free from a recession that ended four years ago.

The Thomson Reuters/PayNet Small Business Lending Index, which measures the overall volume of financing to small U.S. companies, rose to 115.1 from a downwardly revised 108.1 in April, PayNet said on Tuesday.

From a year earlier, the index jumped 9 percent, putting it within striking distance of the five-year high of 116 reached in December. The April figure was originally reported at 110.5.

Because small companies typically take out loans to buy new tools, factories and equipment, an increase in borrowing can be a prelude to new hiring. Historically, PayNet’s lending index has correlated to overall economic growth one or two quarters in the future.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza