Small Business Insights - May 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 SBLI seasonally adjusted originations decreased 14% from 144.8 in February 2020 to 125.2 in March 2020. Compared to the same month one year ago, the index is down 11%; this is the largest year-over-year decrease since mid-2016, reflecting the start of the COVID-19 impact.

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 U.S. SBDI 31-90% increased 14 bps from 1.59% in February 2020 to 1.73% in March 2020. This is the highest month-over-month change in the history of the Index. As compared to one year ago, delinquency increased by 24 bps (16%).

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 Darryl Tyndorf, Sarah Briscoe and Elaine Makdah as they present our first monthly small business insights webinar, moderated by VP Financial Institutions Leader Barry Ripes. They review the latest small business lending and delinquency activity and offer their insights on the implications for the commercial credit markets.

Review the Strategic Insights for May 2020 here