borrowing

According to the stats provided by PayNet, borrowing by small businesses in the United States increased at a record pace in May, which is a good sign of that economic growth is accelerating.

Meantime, the Thomson Reuters/PayNet Small Business Lending Index which measures the overall volume of financing to U.S. small businesses increased by 26% in May from a year earlier.

Small businesses borrowing is a significant support for the economy because they give about 80% of hiring. The loans PayNet tracks are typically used to buy or update plants and equipment.

According to the stats released by the Federal Reserve in April American consumers borrowed more money for the 7th consecutive month. However, the central bank reports that Americans cut back on their credit cards.

Consumer borrowing increased by about $7.2 billion boosted by greater demand for school and auto loans. A category that measures credit card use fell for the second time in three months. It has risen only twice since August 2008, the height of the financial crisis.

According to the report released by the Federal Reserve the financial system purportedly continued its pace towards healing from credit crisis. The survey polled senior bank executives who reported an increased demand for commercial real estate loans even though there was a significant damage caused to residential housing markets where demand for mortgages declined.

But banks have been cautious about lending and consumers wary of piling on debt, and the data showed there was still some ways to go before credit conditions return to normal.

US regulators serviced Bank of America, Citigroup and Barclays with subpoenas over the investigation into the setting of the London interbank offered rate, or Libor, for U.S. dollars between 2006 and 2008, the Financial Times said.

UBS was among other banks who received subpoenas from US and Japanese regulators over whether it made "improper attempts" to manipulate LIBOR rates, the benchmark price for interbank borrowing costs.

In December consumers in the United States borrowed less for an 11th consecutive month. Americans contracted their credit card spending while increased borrowing for cars and other products.

This was taken by analysts as a sign that Americans may soon return to spending, a necessary condition for economic recovery.

 If you are going to buy a new house before selling your existing one, where will you take money for a down payment? One of the common ways to finance your new purchase is to take a bridge loan. They have become popular because sellers have increased difficulty to sell their property in a short time frame. However, be careful. The interest rates are high, and there are a lot of additional costs and fees involved. Read more about all sides of bridge loans to make a more educated decision. 

Bridge loans characteristics 

 Treasury Secretary Timothy Geithner said he sees positive signs that the economy is recovering, although the recession remains "alive and acute" for families dealing with unemployment and facing home foreclosure.

In testimony before the House Financial Services Committee, Geithner said that Americans were saving much more and borrowing less from the rest of the world.

The economy grew at an annual rate of 3.5 percent in the third quarter of this year, the strongest rate of growth seen in two years.

 For the 7th consecutive month American consumers reduced their borrowing in August as US families have been working hard to pay off their previous debts and banks have cut credit card limits.

The fact that Americans are saving more and borrowing less may be a positive factor for the national economy in a long term but it hampers economic recovery as consumer spending makes up 70% of the US economy.