Now for some good news. The small business economy is finally showing hints of improvement, according to William Phelan, the co-founder and CEO of commercial lending data provider PayNet, which collects loan information from several hundred capital equipment lenders around the country on a monthly basis. During a meeting this morning at Bloomberg’s New York offices, Phelan said his company’s small business lending index showed defaults by private companies on term loans of $1 million or less fell for the first time in two years this December. He thinks this is significant because until this November double-digit default rates had been the norm. Phelan said small business owners were starting their “gradual march to expansion,” though demand for loans this December was down 39% compared to December 2006.
You can catch an interview with Phelan on Bloomberg’s Market Surveillance radio show tomorrow morning around 7:50 am EST when John Tucker leads his daily small business report.