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The banks themselves are no doubt pleased, but as an indicator of what to expect from the economy over the next few months the number is even more important, suggesting business owners may be in a hiring mood.

“From an economic point of view [the growth in business lending] is a real positive because small and medium-sized businesses are the real engines of job creation,” said Craig Alexander, chief economist at Toronto-Dominion Bank.

Mr. Alexander says the rising demand for credit suggests an uptick in startups as well as capital investment by existing companies.

It also shows that lenders are keen to lend. For the past decade the entire sector has benefited enormously from booming consumer borrowing, especially for mortgages. But with household debt now sitting at record levels, that train is starting to slow and players need something to take up the slack. It’s no secret that businesses are seen as ideal candidates.

From an economic point of view [the growth in business lending] is a real positive because small and medium-sized businesses are the real engines of job creation

“There’s a strong willingness on the part of banks to lend [to this sector] and why wouldn’t you want to lend to businesses for a slightly better margin,” said National Bank Financial analyst Peter Routledge.

Business lending by the banks has been growing steadily over the past few years, hovering just below $300-billion for most of 2009 and 2010, the Bank of Canada’s statistics show.

Larger companies typically rely on the bond market when they need credit, and analysts say their issuance has risen significantly as well.