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(Reuters) – Borrowing by small businesses jumped in August, data released by PayNet Inc on Friday showed, adding to evidence the economy is not headed toward a double dip recession as some analysts have feared.

The Thomson Reuters/PayNet Small Business Lending Index, which measures the overall volume of financing to small businesses, rose 15 percent in August from a year earlier, PayNet said.

That’s the fastest gain since March 2006, marking the highest level of borrowing tracked by the index since December 2008.

"I don’t think it’s a head fake," William Phelan, PayNet’s president and founder, said in an interview, adding that the increase in borrowing was not confined to any one industry but was broad-based.

"The small business economy is transforming from a stalled mode to a growth mode, and we are starting to see small business expand and borrow more money to invest in plant and equipment," he said.

The surge in borrowing by small businesses, seen as a harbinger for the broader economy because they account for as much as 80 percent of new hiring, comes amid other signs the economy is headed for renewed expansion.

New claims for jobless aid fell last week, data released on Thursday showed, and manufacturing in the Midwest grew faster than expected in September.

"It’s a good sign, finally, of the green shoots" of the recovery, Phelan said. "Small businesses are much more confident about parting with their cash."

Separate data released by PayNet on Thursday showed that fewer companies are falling behind on their existing loan payments.

That trend may in turn boost borrowing, since higher repayment rates can free up capital that lenders might have otherwise set aside against the possibility of default.

Accounts in moderate delinquency, or those behind by 30 days or more, fell in August to 2.77 percent from 2.93 percent in July, PayNet said on Friday.

Accounts 90 days or more behind in payment, or in severe delinquency, fell to 0.84 percent in August from 0.91 percent in July.

Accounts behind 180 days or more, or in default and unlikely to ever get paid, fell to 0.83 percent of total receivables in August, from 0.87 percent in July, according to PayNet, which provides risk-management tools to the commercial lending industry.

The Thomson Reuters/PayNet small business lending index is correlated to developments in the overall economy, with changes in the index preceding changes in the overall U.S. economy by two to five months.

PayNet collects real-time loan information, such as originations and delinquencies, from more than 200 leading capital equipment lenders.

(Editing by Chizu Nomiyama)