Small Business Lending Climbed 20 Percent in October

Borrowing continued an upward trend in October, as small businesses renewed their expansion plans and grew more confident in conditions for the coming year.

The Thomson Reuters/PayNet Small Business Lending Index jumped 20 percent in October, marking the 15th consecutive month of double-digit growth. The study also showed a trend toward lower-risk profiles among small firms.

"What we've been undergoing is a new economic order," said PayNet president William Phelan. "The economy is adaptable, and it's adapted to the new reality."

Phelan added that underlying economic strength in the U.S. has been overshadowed by volatility on Wall Street.

"Profits drive confidence, and we're not seeing that profitability reported anywhere because these are privately owned companies," he told Reuters.

About 7 percent of U.S. small businesses defaulted or "went under" in 2009, but that measure is expected to drop to 3 percent by the end of next year. Improvements in delinquency rates among consumers and businesses also bode well for borrowing and financial planning trends. However, experts still view unemployment as the leading obstacle to market-wide financial stability.