The Thomson Reuters/PayNet Small Business Lending Index, which measures the overall volume of financing to U.S. small businesses, rose 20 percent in October after increasing a revised 12 percent in September, PayNet said on Thursday.

Still, at 98.1, the index shows borrowing has not yet recovered to its level of 100 reached in 2005, well before the credit boom that burst with disastrous effects in 2007 and 2008.

Increased borrowing by small businesses points to better times for the broader economy because small firms account for the lion’s share of new hiring. Companies use loans to buy equipment, and they need people to operate that equipment.

“It’s not showing tremendous strength,” PayNet founder Bill Phelan said in an interview. “But certainly this shows we are not headed for a double dip.”

Photo by Billy Brown