July 1 (Reuters) - U.S. small businesses boosted borrowing for a third straight month in May, driving the Thomson Reuters/PayNet Small Business Lending Index to its highest in more than seven years, according to data released on Tuesday.
The increase, to 127.1 from 125.4, suggests small business owners continue to see demand rising and are investing in their firms, PayNet founder Bill Phelan said. It was the highest level since March 2007, and the third highest level on record.
"I think it would be hard to change the momentum here anytime soon," Phelan said. The index, which is correlated with U.S. gross domestic product growth two to five months ahead, suggests the economy will rebound this quarter and next from a dismal first quarter, he said.
A separate index released by PayNet showed loan delinquencies unchanged from the prior month, with delinquencies of 31 to 180 days, PayNet's broadest measure of late loan payments, at 1.48 percent of all loans made.
The index hit a high of 4.73 percent in August 2009. The record low was 1.44 percent last October.
PayNet collects real-time loan information such as originations and delinquencies from more than 250 leading U.S. lenders.
(Reporting by Ann Saphir; Editing by Chizu Nomiyama)