Borrowing by small U.S. firms in February rose from a month prior, but was down from the year earlier as business owners remained cautious about investing amid policy uncertainty, data released on Monday showed.
The Thomson Reuters/PayNet Small Business Lending Index for February registered 132.9, unadjusted for seasonal trends, up from 124.2 but down 4 percent from last February.
Movements in the index typically correspond with changes in gross domestic product growth a quarter or two ahead.
Bets that U.S. President Donald Trump's planned tax cuts will boost corporate profits have lifted U.S. equities since his November election.
But prospects for other Trump policies, including a bid to change national health insurance laws that failed earlier this month, have increased uncertainty.
"The private companies are still looking for the right time and the right conditions to put their money to work again," said Bill Phelan, PayNet's chief executive and founder. "They don't have the confidence to go all in."
Small business borrowing is a key barometer of growth because small companies tend to do much of the hiring that drives economic gains.
Meanwhile, the number of companies falling behind on paying back existing debts has stayed low, PayNet data also showed. The share of loans more than 30 days past due was 1.67 percent in February, unchanged from January.
PayNet collects real-time loan information such as originations and delinquencies from more than 325 leading U.S. lenders.
(Reporting by Ann Saphir; Editing by Chizu Nomiyama)