May 31, 2017
By Bob Coleman
Editor, C-Suite Wednesday
C-Suite Wednesday — Main Street Delinquencies Remain Low
Concludes Paynet’s Q1 Small Business Credit Outlook Report.
Small businesses remain in a healthy position relative to historical delinquency trends and are exhibiting modest default rates.
Private companies are keeping their financial powder dry. The Thomson Reuters/PayNet Small Business Delinquency Index (SBDI) 31-90 days past due stayed flat at 1.34% from February 2017 to March 2017. As compared to one year ago, delinquency increased by 13 bps (11%). Construction, Health Care, and Transportation all showed increases of 2 bps. Retail and General both showed 1 bp decreases
Other than a brief bump after the election, private companies are holding back on investments. The environment remains wait-and-see, which is still an improvement from the middle of 2016 when the pull-back was dramatic.
Fear and uncertainty seem to be the dominant issues holding back expansion, and this fear is bringing the business cycle to the edge of contraction. Yet, the reason that an inflection point in the business cycle is unlikely now, or during the next few quarters, is the stable financial health of private companies.