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The Thomson Reuters/PayNet Small Business
Lending Index fell to 119.2 last month from 122.4 in January.
Still, the index was up 7 percent from February 2014, signaling
a steadily improving sector.
The index gauges borrowing by firms with $1 million or less in
outstanding debt.
An increase of 1 percent to 2 percent indicates businesses are
borrowing to replace worn out assets, PayNet founder and
President Bill Phelan said.
Higher readings signal that firms are investing more to increase
their production of goods and services. That could include
buying new machinery, purchasing more property or expanding
business divisions.
"It tells us that these businesses are investing because they
are getting more orders and more purchases from their
customers," Phelan said.
Small businesses account for nearly half of gross domestic
product in the United States, and an increase investments means
that GDP will likely increase with a lag of two to five months.
A separate PayNet index showed loan delinquencies of 31 days to
180 days inched up by four basis points from last month to 1.57
percent.
The slight increase was no cause for concern as it indicates
cautious use of credit by small firms, Phelan said, adding that
defaults will be moderate in 2015.
PayNet collects real-time loan information such as originations
and delinquencies from more than 250 leading U.S. lenders.
(Reporting by Elvina Nawaguna; Editing by Alan Crosby)
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