Canadian small business lending tumbled in June for the seventh consecutive month, data from PayNet showed on Tuesday, as firms were unwilling to spend more on investment without greater demand for their products. PayNet's Canadian small business lending index fell to 113.9 in June from 117.7 in May. A measure of lending to medium-sized businesses fared better, rising to 211.1 from 207.2.
Revised figures showed the small business index has declined every month since falling in December. A slowdown among small businesses will probably lead to slower economic growth in general, said PayNet President Bill Phelan. "They're just not seeing heavy demand for more goods so they're not willing to invest in more production capacity," Phelan said. The decline in activity was seen across a number of industries, including manufacturing and retail, sectors that economists had hoped would benefit from the lower price of oil. Similarly, lending was down in the provinces of Ontario and Quebec, Canada's manufacturing hubs. Alberta, where the country's oil sands are located, also continued to decline.
The 30-day delinquency rate on loans declined to 1.17 percent of small businesses from 1.20 percent. The number of firms that were more than 90 days behind on their payments edged up to 0.35 percent from 0.31 percent. PayNet tracks the lending habits of around 750,000 small- and medium-sized businesses across Canada via input from lenders.