September 19, 2013 / 9:07 AM / in 4 years

Canadian commercial lending rose to record in second-quarter: PayNet

TORONTO (Reuters) - Commercial borrowing by small and medium-sized businesses in Canada rose in the second quarter to a record high, driven by a pick-up in service sector firms, a PayNet survey showed on Thursday.

PayNet, which tracks commercial financing for millions of North American small and medium-sized businesses, said its Canadian Business Lending Index rose to 205, its highest level since the index began in 2005.

That made for a 3 percent gain from the previous quarter, while the first quarter’s performance was also revised higher.

Stand-out industries included the food and accommodations sector, as well as retail and transportation, said Anthony Zambon, director of PayNet Canada.

“It’s a good indication of full recovery from the recent recession,” said Zambon. “It’s higher ground for Canadian businesses.”

Moderate loan delinquencies - those that are behind in payments by 30 days or more - eased to 1.45 percent of total loans in June from 1.53 percent the month before.

But loans that are more than 90 days late - considered severe loans in arrears - rose to 0.53 percent from 0.43 percent.

Still, that’s a positive sign that some risk taking is returning, said Zambon.

Reporting by Leah Schnurr; Editing by Nick Zieminski

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