The Thomson Reuters/PayNet Small Business Lending Index (SBLI) measures the volume of new commercial loans and leases to small businesses indexed so that January 2005 equals 100. Because small businesses generally respond to changes in economic conditions more rapidly than larger businesses do, the SBLI serves as a leading indicator of the economy. The index is a highly correlated leading indicator of the GDP by 2 to 5 months.
Seasonally adjusted and presented both on an absolute index basis and on a change versus the same month one year prior basis, it is published monthly as follows:
PRELIMINARY data for current month reflecting most recent small business lending activity released
REVISED data for month preceding Preliminary release
FINAL data for month preceding Revised release
Click here to download the recent month’s Small Business Lending Index
To create the SBLI, PayNet tracks the new borrowing activity by millions of US businesses as reported by the largest lenders in the PayNet database. Lenders that are primarily purchasers and sellers of loan and lease portfolios are excluded from the SBLI calculations. For qualifying lenders, their occasional purchases of loan and lease portfolios are also excluded. Similarly, restructurings of existing loan and lease obligations are also excluded; the objective is to capture new originations as a measure of the expansion activity of small businesses.
The list of lenders included is dynamic, and lenders are spliced in and out so that their entry or exit is seamless. The SBLI (before seasonal adjustment) is based on the dollar weighted percentage change in qualifying new originations from the prior month to the current month, for qualifying lenders with available data in both months.
For loans and leases to qualify for inclusion in the calculation, they must be transactions made to a Small Business, and to be deemed a Small Business, the business borrower must have total loan and lease outstandings across all qualifying lenders of less than $1M at both the start and the end of the month in question.
Small Business loan and lease originations are somewhat seasonal, particularly in some industries. So to permit comparisons from any one month to any other month (rather than being limited only to comparisons with the same month in previous years), the SBLI is seasonally adjusted, using historical seasonal originations patterns. It is then presented both on an absolute index basis, indexed so that January 2005 equals 100, and on a change versus the same month one year prior basis.
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Download additional information about the SBLI below:
Click here to download the Small Business Lending Index historical data.