Tuesday, June 7
June 7, 2011
Economic life of LA1 businesses in limbo
June 9, 2011Borrowing among small businesses posted a boost in April, indicating that Main Street may be growing impatient with waiting for the overall economy to catch up with its desire to advance.
According to a report issued by the Thomson Reuters PayNet Small Business Lending Index, overall lending volume for small business increased 17 percent in April from the same time one year earlier.
Although the Gross Domestic Product grew by only 1.8 percent during the first quarter of 2011, and a stock market plunge of nearly 1,000 points and sudden rebound Thursday suggest that the national economy is still far from healthy, small business owners appear to be making a move to stabilize their part of the financial world.
“The first two months of the year were kind of slow then it started picking up in March and April,” Business First Bank Regional President Don Hingle said. “I think people in this area are building new facilities in some cases. They are investing in equipment, and expanding their operations a little bit.”
Borrowing by small business is generally viewed as a forerunner to what could be taking place in the rest of the economy.
The PayNet index also showed that businesses that had been moderately delinquent on loans by 30 days have improved their payback practices as their delinquency rate on loans fell to 2.06 percent in April. Severe delinquency accounts, those past due by 90 days, dropped to 0.64 percent in April from 0.67 percent in March. Accounts more than 180 days in the rears also showed a slight improvement from 0.77 percent to 0.76 percent.
