Your Guide to the Small Business Lending Index and Its Largest Year-Over-Year Downturn since 2009

Steve O'Connor2016 Trends, Alternative Financing, Bank Loans, Funding Options, Small Business FinancingLeave a Comment

The Small Business Lending Index released by Thomson Reuters and PayNet showed a noteworthy downturn in April of this year.

The month of April brought on a new data release for the Thomson Reuters/PayNet Small Business Lending Index, showing a decrease for the second consecutive month. The Small Business Lending Index (SBLI) measures the volume of small business loans issued over the past 30 days. The index is based on the most recent data from the largest U.S. commercial and industrial lenders, and includes data about both loans and leases. Ultimately, the data presented by the SBLI provide early signals of future economic growth, demand for capital, and business fixed investments across multiple sectors.

The index presents a somewhat concerning picture of the economy, with growth slowing in construction, agriculture, and retail sectors. Transportation, education, and manufacturing seem to be filling the gap, while other sectors like finance, are maintaining their positions. Because small businesses generally respond to changes in economic conditions more rapidly than larger businesses, we could be seeing indications of the overall economy in these trends.

Today’s small businesses continue to be big supporters of the economy—with about 55% of all US jobs coming from small businesses. Those businesses will continually need financing for any number of reasons, ranging from funding growth to managing payroll. Wellen provides these small businesses with an alternative funding source when all indications are that traditional small business lending is not an option.

 

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