Small Business Insights - July 2020

Because small businesses generally respond to changes in economic conditions more rapidly than larger businesses do, the PayNet Small Business Indices serve as a leading indicator of macroeconomic and industry trends.

The Small Business Lending Index (SBLI) measures the volume of small business loans issued over the past 30 days and is based on the most recent data from the largest commercial and industrial lenders in the PayNet U.S. database, including both loans and leases.

According to the latest data, the PayNet Small Business Lending Index (SBLI) stemmed its freefall in May, ticking up 2.1 points (+1.9%) to 111.4 but is still nearly 30% below its year-ago level. The SBLI 3-month moving average declined 8.9% and is down 25% compared to a year ago.

The Small Business Delinquency Index (SBDI) is designed to gauge small business financial stress and default risk at the national and state levels, including industry segmentation. The SBDI is designed to provide the insight that financial services executives, economists, policy makers and regulators need to understand the stage of the business cycle and to set credit oversight policies.

The PayNet Small Business Delinquency Index (SBDI) 31–90 Days Past Due spiked 31 basis points (bp) in May following a 36bp rise in April. The SBDI is now 86bp above its year-ago level. Meanwhile, the SBDI 91–180 Days Past Due increased a more modest 6bp and is now up 15bp since May of last year.

The PayNet Small Business Indices:

  • Provide early signals of future economic growth, demand for capital, and business fixed investment across multiple sectors of the economy.
  • Give lenders a snapshot of the future so they can adjust their approval criteria as needed.
  • Are a reliable predictor of small business financial stress.
  • Serve as a statistically valid indicator of unemployment change.

 

Join Sarah Briscoe and Elaine Makdah as they present the small business insights webinar, moderated by VP of Marketing, Rissa Reddan. They will review the latest small business lending and delinquency activity and offer their insights on the implications for the commercial credit markets during these uncertain times.

Review the Strategic Insights for July 2020 here.