Small businesses are borrowing more — and increasingly paying their bills faster.

According to the Experian/Moody’s Analytics Small Business Credit Index released Wednesday, in the fourth quarter of 2014 the outstanding credit balances of small businesses grew by 2.2% from a year ago, while delinquency rates declined to a cyclical low of 8.5%.

The index, which measures credit conditions for businesses that have fewer than 100 workers, climbed 1.5 points to 116.7.

“Small businesses are finally kicking into high gear,” Mark Zandi, chief economist for Moody’s Analytics, said in a press release announcing the results.

“They are investing and hiring more and are borrowing more to finance their expansion. They are also repaying what they have already borrowed in a more timely way. Business conditions are much improved and will likely improve even more in coming quarters.”

Over the past year small businesses have reduced the number of days they pay their bills beyond contacted terms by a full day, according to the report. Moreover, the average commercial risk score for a small business rose 3.1% to reach 61.6 (higher is better), while bankruptcy rates dropped significantly, with 10.9% fewer businesses filing.

“It will be interesting to see if small businesses can continue to maintain this payment behavior as we move through 2015. If they can, the credit spigot will continue to widen, opening up more opportunity for small businesses to grow,” said Dan Meder, vice president for Experian’s business information services.

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