Dec 12 (Reuters) –Small businesses re-engineered themselves during the recession and are now more confident and profitable, with lower-risk loan profiles, and are increasingly spending for expansion.
Borrowing is up for new investment by small businesses, which have consolidated, incorporated technology to boost efficiency and outsourced while often keeping hiring dormant, “What we’ve been undergoing is a new economic order,” he said. “The economy is adaptable, and it’s adapted to the new reality.“The Thomson Reuters which measures the overall volume of financing to small businesses, jumped 20 percent in October. It was the 15th month of double-digit growth.
U.S. gross domestic product will likely be stronger over the next two to five months, based on the small business lending growth. Small business is in better fiscal shape then in 2005, prior to the recession, with considerable improvement in risk profile.There are millions of small businesses; their financial capacity has improved vastly since 2009.
About 7 percent of small businesses in the United States “went under” in 2009, and that default measure will be closer to 3 percent at the end of 2012.
“We’ve seen delinquencies improve consistently to levels that are now below risk from 2005, so that lends confidence in my mind that we’ve got these millions of companies in the United States that now have financial capacity that didn’t exist three years ago”
Agriculture, manufacturing and construction are gaining traction, and equipment producers for these industries are benefiting from the new investment. New truck production is above pre-recession levels, with the growth rate up to 21 percent in the most recent quarter from 15 percent the prior quarter.
In one example of ongoing consolidation — a “systemic trend” — there are 19 percent fewer grocery store start-ups in 2010 from the prior, as many Mom and Pop stores have given way to Costco and other major retail business now in that business.
PayNet, President William Phelan said at the 2011 Reuters Manufacturing and Transportation Summit on Monday December 12, 2011.
Merchant Advisors are your trusted consultants for obtaining financial help at the right time and on the best possible terms. Improve your business with loans from Merchant Advisors. Please Visit: Merchant Advisors