Report: Small biz still cautious about borrowing

The erratic pace of borrowing by small-business owners continued in November—a sign that they remained cautious about hiring. A report released this morning by PayNet, which provides credit ratings on small businesses, showed just a 1% increase in borrowing in November. That followed an 11% jump in October. Borrowing fluctuated throughout 2012. PayNet bases 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 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 a bright side to the drop in borrowing at small businesses: Companies have been paying down debt. PayNet says they’re generally in good financial shape, noting that only 1.6% of small companies are expected to have had their credit ratings lowered in 2012.