The increase, to 128.5 from 120.0 in June,
suggests small business owners are investing in their companies
well above what is needed simply to replace outmoded or worn
equipment, PayNet founder Bill Phelan said.
It was the highest level since March 2007, and the third highest
level since the index launched in 2005.
"A solid third quarter is taking shape here, for small
businesses and for the U.S. economy," Phelan said. The index is
correlated with U.S. gross domestic product growth two to five
months ahead. "I think they are seeing demand right now. ...
This has got to be showing some strength in orders."
The rise in borrowing is also good news for jobs, Phelan said,
citing a historically strong correlation between loan growth and
A separate index released by PayNet showed loan delinquencies
ticked up from the prior month, with delinquencies of 31 to 180
days, PayNet's broadest measure of late loan payments, at 1.55
percent of all loans made, compared with 1.53 percent in June.
The index hit a high of 4.73 percent in August 2009. The record
low was 1.44 percent last October.
PayNet collects real-time loan information such as originations
and delinquencies from more than 250 leading U.S. lenders.
(Reporting by Ann Saphir; Editing by Leslie Adler)
[© 2014 Thomson Reuters. All rights
Copyright 2014 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.