Canada, 23rd September: Canada’s small businesses are witnesses a positive trend with increased commercial lending reported in the second quarter.
Small firms in Canada continue to signal growth despite an economic uncertainty prevailing in the US and Europe.
Canadian small businesses upbeat– PayNet’s latest report titled Canadian Business Lending Index showed an increase of 3 percent in Q2 over the first three months of 2011. As per the report, this has been the record leap since an increase of 5 percent in Q4 of 2007.
Canada’s small as well as medium businesses are growing at a good speed, and this is certainly good news, says founder and president of PayNet, William Phelan.
The financial system is at a risk of falling and experiencing new shocks as the economic crisis is hitting the US and Europe in a big way.
Phelan said the Canadian index has shown growth both quarter over quarter and year over year since the year 2007 and small businesses have begin expanding once again. PayNet is involved in tracking trends of commercial lending to small and medium businesses in Canada and its commercial lending index is a major indicator for economic development.
Increased moderate delinquencies signal better economic health of small businesses–There has been a marginal but a noticeable increase in risk-taking by small and medium businesses as reflected in the increased moderate delinquencies.
PayNet’s index showed an increase in moderate loan delinquencies to 1.76 percent in June this year. Investment by medium and small businesses signals growth in the economy and this is what is happening in Canada, Phelan added. It may be noted that moderate loan delinquency had reached an all time high during peak recession by touch 3.8 percent in 2009, he maintained.
So, this clearly shows that medium and small businesses in Canada have become financially sound and more solvent than the period since August 2009, Phelan clarified.
Economy of Canada witnessed a slowdown in Q2 due to tsunami and earthquake in Japan and this was the first quarterly fall since the recession in 2008-09.
Canada still continues to keep its standing solid by emerging among the stronger international economies despite a fall in the predicted economic development by IMF (International Monetary Fund) for the year 2011 from 2.9 percent to 2.1 percent and from 2.6 percent to 1.9 percent for the year 2012.