NEW YORK (AP) – The erratic pace of borrowing by small businesses owners continued in November – a sign that they were still cautious about hiring.
A report released Wednesday by PayNet, which provides credit ratings on small businesses, showed just a 1 percent increase in borrowing in November. That followed an 11 percent jump in October. Borrowing fluctuated throughout 2012.
PayNet based its findings on information in its database on the amount of new commercial loans and leases granted to small businesses. The slowdown in borrowing wasn't surprising. Many small businesses have been reluctant to borrow – and therefore to expand or hire – because of uncertainty about the economy and taxes. And the presidential election and debate in Congress over what's known as the fiscal cliff intensified that uncertainty in November.
The Thomson Reuters/PayNet Small Business Lending Index, compiled from PayNet's data, rose to 108.3 in November from October's revised 107.
There is one bright side to the drop in borrowing at small businesses: Companies have been been paying down debt. PayNet says they're generally in good financial shape. It says that only 1.6 percent of small companies are expected to have had their credit ratings lowered in 2012.
The PayNet report came two days after the business software maker Intuit said small businesses created 15,000 new jobs in December – half the number created in November. More readings on small business hiring during December are expected this week, including the Labor Department's report on employment that's due out Friday.