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Canadian small business lending falls again in April -PayNet

Published 2016-06-15, 05:00 a/m
© Reuters. Canadian small business lending falls again in April -PayNet

OTTAWA, June 15 (Reuters) - Borrowing activity by Canadian
small businesses fell for the fifth consecutive month in April,
data from PayNet showed on Wednesday, pointing to an economy
that is struggling to regain momentum after the steep drop in
oil prices over the past two years.
PayNet's Canadian small business lending index declined to
117.5 in April from 121.7 the month before. A measure of lending
to medium-sized businesses also fell to 209.4 from 213.5.
Monthly declines were seen in every industry except the
wholesale sector, which edged up to 164.2 from 162.4. The
picture was similarly bleak across regions, with only Manitoba
rising on the month.
"What we're looking at is slower GDP and probably lower
credit quality for the future in Canada," said PayNet President
Bill Phelan.
"The contagion is broadening and impacting the smallest
companies, which are the leading bellwethers for where GDP is
going," said Phelan.
Canada was in a mild recession last year as the
oil-exporting country was hit by the drop in commodity prices.
While growth was relatively strong at the start of 2016,
economists and policymakers expect the second quarter will slow,
partly due to the impact of last month's wildfires in Alberta.
The 30-day delinquency rate for small businesses edged up to
1.17 percent, the highest level in four years. The amount of
loans that were more than 90 days behind on payments dipped to
0.31 percent, but Phelan said he expects to see that move higher
in the coming months.

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