Small business lending sank to its lowest level in more than a year in September, according to data released Thursday, and firms appear to be falling under increasing financial duress.
The latest Thomson Reuters/PayNet Small Business Lending Index dropped to 94.1 from a downwardly revised 108.9 in August. The drop occurred during the same month the Federal Reserve announced new measures meant to lower interest rates and encourage borrowing and spending by U.S. companies.
The monthly report is based on observations from more than 250 lenders across the country. Small business hiring also slowed in September.
Meanwhile, PayNet data showed that 1.24 percent of business borrowers are at least 30 days overdue in their payments, up from 1.18 percent in August, suggesting more firms are stumbling on difficult times. September marked the first such increase since 2010.
Borrowing woes and limited access to capital will only worsen the mood for small business owners, whose outlook is already especially bleak just days before the election. Several reports in the past couple weeks have shown small business hiring plans and financial well-being have sunk to historically low levels.
Did your business try to borrow money in the last few months? How would you describe the lending climate right now? Please share your take in the comments below.