Small businesses are not likely to experience robust growth anytime soon, according to the latest findings of the SB Authority Index.
Newtek Business Services, which created and maintains the Index, is a non-bank small business lender, lending over $100 million as principal to small businesses as well as processing over $3.5 billin electronic payments for their customers in addition to other services. Comparing the last four and a half years, there is a 0.83 correlation between the Index and GDP. I spoke with Barry Sloan, CEO of Newtek Business Services on their latest findings.
LL: What aspects in the small business economy are you seeing uptrends?
BS: We have tracked our index going back to the fourth quarter of 2007. The economy hit its low point according to GDP information in the first quarter of 2008. The up-trends that we have seen since the economy bottomed have been short term interest rates declining, increases in small business lending off of a zero base, and consumer spending beginning to recover.
LL: What indicators do you look at when formulating the index?
BS: We look at eight leading indicators and movement and health of the economy from a variety sources:
1. ADP National Employment Report
2. Russell Microcap Segment of the U.S. Equity Market
3. Prime Rate
4. Retail Sales
5. Newtek Merchant ProcessingPage 1 of 4 | Next Page