Main Street Monday – PayNet’s Quarterly Credit Outlook Hints of Mini Wake-Up Call

December 3, 2018

By Mary Miller
Contributing Editor, Main Street Monday

Main Street Monday – PayNet’s Quarterly Credit Outlook Hints of Mini Wake-Up Call

PayNet’s recently released Quarterly Credit Outlook shows that while small business lending remains healthy, the end of Q3 reflects a mini wake-up call. This is reflected by small signs pointing to increased risk.

The good news is that the index remains up 2% for the year, its 12th consecutive increase over last year. However, by the end of September, the index fell to its lowest level of the year. The end of Q3 marks the end to an 8-month run of double-digit increases.

“The streak of eight consecutive months of double-digit year-over-year increases finally ended in September, but the market for small business lending remains strong,” says PayNet, Inc., President William Phelan. “While rapid investment growth can jumpstart the economy, Main Street America will likely benefit from a brief period of consolidation in order to absorb recent expansion efforts. We expect to see the current small business investment cycle continue to expand at a more sustainable rate, and as such we don’t view recent data as evidence of a coming sea change.”

Overall, the majority of industry sectors and regions are holding steady.

Other highlights from the PayNet Quarterly Credit Outlook include:

• The lending index remains in the top 20% of all historical readings in most large states
• Year-over-year basis, lending rose across the board in the top 10 states for the seventh straight month
• Despite recent increases, delinquency levels remain more than 200 basis points below historic highs across all major industries
• Transportation & Warehousing remained a hot industry sector for investment, reaching an all-time growth high with a gain of 21.7%