October 23, 2017
By Bob Coleman
Editor, Fraud Friday
Main Street Monday — Main Street Paying its Obligations Better than Ever
“Conditions are in place for small businesses to drive GDP growth resulting from exceptional financial health,” states William Phelan, president of PayNet, Inc.
Small Business Delinquencies
The PayNet Small Business Default Index (SBDFI) at 1.84% is 35% below pre-crisis readings, and has been receding in recent months. Much of the improvement in recent months has come from two formerly high-risk sectors experiencing improvements in default rates. Mining default rates have declined close to 1%-point over the last year, and Transportation default rates have been declining at a 0.6% annualized rate over the last three months.
The Thomson Reuters/PayNet Small Business Delinquency Index (SBDI) 31-90 days past due decreased to 1.33% in August 2017 from 1.35% in July 2017. Compared to one year ago, delinquency increased by 1 bp.
Transportation showed a 10 bp decrease in delinquency. Increases in delinquency are shown in both Agriculture (2 bps) and Construction (1 bp).
Small Business Lending
The August 2017 Thomson Reuters/PayNet Small Business Lending Index (SBLI) increased 8% to 134.2 in August 2017 from 123.8 in July 2017. Compared to August 2016, the SBLI increased 1%.
Top growth sectors driving investment expansion by small businesses are found in the
Construction (+5.6%) and Accommodation & Food Services (+5.9%) businesses which together represent over 13% of the small business economy. Arts, Entertainment & Recreation (+10.0%) remains the top growing sector among small businesses. In a big turnaround, Mining (+3.2%) and Wholesale Trade (+3.0%) are now both positive for the first time in the last several years.
After many months of double-digit contractions, growth in the Healthcare sector has stabilized dramatically, and has been slightly positive in recent months with a 0.2% increase.