The December PayNet small business trends  show a strong finish to 2013 that will help sustain growth in the U.S. economy in the 1st quarter of 2014.

The Thomson Reuters/PayNet Small Business Lending Index (SBLI) extended its string of year over year increases registering 121.6 in December, a 5% increase over last year and a 6% increase over November, which was restated to 114.6 from a preliminary value of 111.4. When small businesses invest as shown in this report, they are expressing visible optimism for future profits.

At the same time, loan delinquencies increased in this latest report signaling an end to the best part of the credit cycle. The Thomson Reuters/PayNet Small Business Delinquency Index (SBDI) increased slightly to 1.47%. Even so, credit quality remains very high; this latest uptick signals small businesses are willing to take more financial risks as shown in the increased SBLI.

“Small businesses are hitting a bunch of singles and doubles, rather than swinging for the fences. This steady growth is the type needed to avoid over expansion,” says William Phelan, president of PayNet.