PayNet Canada commercial lending index highest since 2008

Thu Feb 28, 2013 4:59am EST
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* Lending index up 6 pct on quarter, 23 pct on year

* Moderate loan delinquencies fall to record low

By Alastair Sharp

TORONTO, Feb 28 (Reuters) - Commercial borrowing by small and medium-sized businesses in Canada hit its highest level since 2008 in the last three months of 2012, and a much smaller percentage of the businesses were behind on their payments, according to a PayNet survey released on Thursday.

PayNet, which tracks commercial financing for millions of North American small and medium-sized businesses, said its Canadian Business Lending Index was up 6 percent in the fourth quarter from the third quarter and up 23 percent year-over-year.

It said the quarterly lending growth was ahead of that south of the border. "The Canadian small- and medium-business market is under steady expansion while the U.S. continues to muddle along," said Anthony Zambon, director of PayNet Canada.

The index rose to a reading of 181, its highest level since the final quarter of 2008, marking a ninth consecutive quarter of growth since the index bottomed out in 2010, and the sixth straight double-digit advance on a year-over-year basis.

The PayNet data contrasts with other reports that have painted a gloomy picture of the Canadian economy late last year, including inflation and retail sales data.

Gross domestic product data due out this Friday is expected to show the economy contracted in December and grew at an annualized pace of just 0.6 percent in the fourth quarter, below the central bank's already reduced forecast of 1 percent.   Continued...