As per the report based on PayNet, there was a drastic drop in the level of borrowings by small businesses in USA in the past 7 months. As per the Thomson Reuters/PayNet Small Business Lending Index which measures the overall volume of financing to small businesses in USA reported a drop of 5 percent from the previous month on a seasonally adjusted basis. It was the lowest reading since October. It was recorded as the fourth-lowest level. When compared with the previous year’s index, it was up by 9 percent in May.
- There was a decrease in accounts in moderate deliquency or those which were behind by 30 days or more in May by 3.36 percent from 3.47 percent in April.
- Accounts which were 90 days or more behind in payment or in severe delinquency also dropped to 1.11 percent in May from 1.21 percent.
- The accounts which are behind 180 days or more or in default and also which are unlikely to ever get paid also declined to 0.91 percent of the total receivables in May from 0.94 percent during April.
Regardless, the regulatory overhauls in the US healthcare and finance industries are making it hard for the small businesses to estimate the costs of the future. This is resulting in holding back of spending by small businesses.