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Canadian Feb small business lending falls for 3rd month-PayNet

Published 2016-04-19, 05:00 a/m
© Reuters. Canadian Feb small business lending falls for 3rd month-PayNet

OTTAWA, April 19 (Reuters) - Commercial borrowing by small
businesses in Canada cooled for the third month in a row as
lower oil prices and weak domestic demand dampened business
investment, data from PayNet showed on Tuesday.
PayNet's Canadian small business lending index dipped to
123.5 in February from 127.0 the month before. The measure of
lending to medium-sized businesses tumbled to 214.9 from 230.5.
The year-over-year gains from industry sectors including
accommodation and food, construction and manufacturing were not
enough to offset the decreases in agriculture, transportation
and wholesale.
"The small businesses are moving in the wrong direction ...
and the big companies aren't healing, they're still in the
throes of contraction," said PayNet's President Bill Phelan.
"What's going on at a high level after you boil down all the
industries and provinces is that the 'tax break' from lower oil
prices is not being spent by consumers," he said.
The drop in the price of oil, a major export for Canada,
dragged the economy into a brief recession last year. While the
economy started 2016 on better footing, it is still struggling
to gain momentum.
The number of small- and medium-sized businesses that were
30 days or more behind on their loans edged up to 1.07 percent
from 1.02 percent, while those that were delinquent by at least
90 days held at 0.32 percent.
Both measures were up compared to a year ago, which suggests
businesses are feeling more financial stress, Phelan added.

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