Data showed on Friday that lending to small Canadian businesses edged up in February, though the number of delinquencies also increased, suggesting firms are unlikely to invest heavily in the near term
The PayNet Small Business Lending index rose to 112.0 from a downwardly revised 110.2 in January, while borrowing by medium-sized firms increased to 190.2 from 187.5.
But the survey also finds, compared to a year ago, small business lending was still down 5% and lending to medium firms slumped 18%, suggesting firms were pulling back after a strong 2017.
At the same time, the number of small businesses that were delinquent 30 days or more rose for the first time since January 2017 to 0.89% from 0.81%
Increases were seen across sectors, including construction, where the delinquency rate rose to 0.9% from 0.84%, and manufacturing, which increased to 2.3% from 2.24%.
The number of firms that were 90 days or more behind increased to 0.3% from 0.25%.
PayNet officials add, although the sizable monthly increase in the delinquency rates is a concern, firms' financial health still remains at a stronger level than a year ago.
