Canadian small businesses growing again after hitting bottom last year
MONTREAL--- PayNet, a firm that provides risk management tools and market insight to the Canadian commercial finance industry, has released the 2nd quarter 2011 Canadian Business Lending Index (CBLI). The Index signals the first signs of definitive growth. Its rise to 133 from the bottom of 127 hit last year is the first solid increase on both a year over year and quarter over quarter since 2007.
PayNet studied over $16 billion of investment in property, plant and equipment by hundreds of thousands of Canadian small and medium sized businesses.
“With this release we can date the bottom at September 30, 2010. Absent any economic shocks the Index at 133 is a milestone in the recovery of the Canadian economy. When small and medium sized businesses are investing, the economy is growing.” notes William Phelan, president of PayNet, Inc.
With over $108 billion of financing in place to Canadian businesses, the asset-based financing industry is the largest provider of debt financing in Canada after traditional banks.
This release confirms the Canadian economy clearly performed better through the recession than the U.S. Canadian investment activity never fell as far as the U.S. and stands at a 38 point advantage; the Canadian Business Lending Index at 133 remains much higher than its U.S. counterpart at 95.
PayNet also released loan delinquency trends on Canadian small and medium sized businesses. Moderate delinquency, business loans 30 days or more past due, rose to 1.80% in the 2nd quarter of 2011, jumping from 1.52% in the first quarter.
“The risk is higher, but the good news is that growth is occurring,” added Phelan. “These releases signal a return to a more normal business cycle. If we can stay on track, ultimately this will lead to job creation; the data tells us growth is broad based across industries and geographic regions.”
PayNet provides an online service to fill in the gap on thin commercial credit information in Canada. PayNet On-Line assists the flow of much needed capital to a variety of Canadian private businesses ranging from construction companies, farms, medical practices, transportation companies and professional service firms; fostering economic growth and jobs.