By BLOOMBERG

BEIJING • China’s beleaguered private companies may be on the cusp of better times, with signs emerging that a government push to boost bank lending is working.

The private sector, which makes up about 80% of employment in the world’s second-biggest economy, has been struggling with a credit squeeze triggered by a campaign to shrink China’s shadow-banking industry.

With corporate defaults hitting a record this year, policymakers acted to restart the credit flow, notably by verbally directing banks to provide more loans.

Here’s a look at data that suggest the worst may be over for private firms: Some older shadow-bank credit is migrating back to the balance sheets of official lenders, a sign that at least some credit wrung out by the government’s financial cleanup is being replaced or relocated.

Loans to small businesses rose on a quarterly basis in the most recent three-month period, the first increase in a year.

Amid the government’s multi-year effort to curb excessive credit, growth in banks’ assets dropped below the nominal growth of the economy. Recent data suggest that the trend is easing, if not reversing.

It’s difficult to see private- sector funding costs directly, but one available proxy suggests that borrowing rates have stabilised.

While still higher than the overall average, annualised interest rates for borrowing from the non-bank sector are falling in Wenzhou in Zhejiang province.