The August 2015 data release of the Thomson Reuters/PayNet Small Business Lending Index (SBLI), which is a leading economic indicator of GDP, decreased 6% to 136.1 compared to the prior month.  July’s value had been restated from 145.2 to 144.1. On a year-over-year basis, the SBLI is up 14% compared to August 2014. 

Although this release of the SBLI is not an all-time high, it remains on par with high levels of investment when compared on a per day basis.  Investment in property, plant and equipment is at the greatest trendline growth rate since the recovery began in 2010. 

“This report shows economic conditions receiving a lift from the small business sector of the economy,” states William Phelan, president of PayNet.  “At a time of weaker public company performance, this report shows small businesses expanding to build more goods and deliver more services to consumers.”

The Thomson Reuters/PayNet Small Business Delinquency Index (SBDI) 31-90 days past due was unchanged at 1.21% from July to August.  On a year-over-year basis, moderate delinquencies declined 6 basis points.  This is the largest year-over-year decrease since March 2014.  Low loan delinquencies signal strong continued financial health and this also means small businesses remain poised to invest further to meet consumer demand for their goods and services.

“We anticipate some rocky roads ahead as big companies transition and overseas markets stabilize, but overall continued expansion and credit quality will remain above average levels for private commercial loans,” Phelan noted.