The Thomson Reuters/PayNet Small Business Lending Index showed that small business borrowing dropped in June. The news service reported that its measure “sagged to 98.5 from 103.8 in May.” The number was the lowest since last October. Of course, in the period from October to mid-spring many experts believed that the American economy was on the mend.
If the fact that something like half of all U.S. jobs are at companies with fewer than 10 workers and that job creation is usually more robust among these firms than among large companies, this new information is particularly bad. It is also an indication that banks have lost confidence in lending to operations that are likely to have few customers and nonexistent balance sheets, no matter how promising their prospects may seem
Douglas A. McIntyre
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