NEW YORK -- Lending to small businesses rose only slightly in July, another sign that companies are hunkering down because of uncertainty about the economy.
A survey released by PayNet, a research firm that tracks loans to small business, shows that lending rose 3 percent after falling five out of the previous six months. The Thomson Reuters/PayNet Small Business Lending Index rose to 103.8 in July from a revised 100.5 in June.
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The index was up 15 percent from a year earlier. But PayNet also said that for the first time in two and a-half years, businesses are taking longer to pay their bills. Loan payments at least 30 days past due rose 0.04 percent to 1.2 percent during July. That means the amount of money that companies hadn't paid by 30 days after the due date came to $1.20 out of every $100.
PayNet's findings are in line with other surveys and reports that point to an overall slowing of business at small companies. The Institute for Supply Management said Tuesday that the manufacturing industry, which includes many small companies, had its third straight drop in activity during August.
Small business owners say they're borrowing less because they're unsure about their sales and the overall economy. One factor in their caution is uncertainty about the presidential election. However, the slowing of the economy this year also has discouraged small businesses from borrowing, hiring and expanding. The economy rose at a weak 1.7 percent annual growth rate during the second quarter.
PayNet bases its index on new commercial loans and leases granted to small businesses by U.S. lenders.