Small Business — Big Concerns

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Man shopping for clothes

It's been a solid earnings season. Stocks are back at multi year highs. Wall Street's on a roll. But there are still a lot of worries for American small businesses.

New numbers from PayNet, a firm that monitors lending for small businesses in the US show loan delinquencies are now at their lowest rate since September of 2006. Only 2.15% of US small businesses are delinquent on their loans.

While that's certainly good news, there's another side of the coin.

PayNet's co-founder and President William Phelan says "delinquencies are falling because small businesses are borrowing less, they've become more risk averse and that's not great for overall business"

Borrowing among small businesses did rise about 12% last month. But it is still at an historically low rate. PayNet says the lending index now stands at 87, the high was 131 back in 2007.

Phelan went on to say "that while small businesses are paying back what they owe, they're not spending and they're not hiring. But they are primed for growth in a big way because they have a lot of cash on hand and at some point, they will start re-investing."

PayNet's statistics show that default rates among small businesses are at their highest in the southeastern part of the country and lowest in the central part of the US. That's largely the case because many farms in the midwest qualify as small businesses and they are doing very well as commodity prices remain high. Corn is near an all-time high. Wheat is near a three year high.

Small and medium sized businesses have accounted for almost two-thirds of hiring in the United States since 1995.

Tune in:

William Phelan will be on CNBC's Squawk on the Street at Monday, May 2 at 10am/et with more details.