June 8, 2021

Caity Roach

SBA Hot Topic Tuesday — Delinquencies Fall to Their Lowest Level Since the Pandemic Began

According to PayNet’s most recent issue of Strategic Insights, small business lending activity is now at the second-highest rate ever recorded and is nearly 28% above its year-ago level. Additionally, delinquencies have fallen to their lowest level since the pandemic began. Nevertheless, defaults remain 72 basis points above year-ago levels.

Here are some of the key findings from PayNet’s most recent issue of Strategic Insights:

  • In March, the PayNet Small Business Lending Index (SBLI) showed an 8.1% increase in lending activity month over month and is now 28% above its year-over-year level.
  • Lending activity improved in all ten of the largest states in March for the first time since December 2019, with the largest gains occurring in North Carolina (+4.2%), Illinois (+2.8%), and Texas (+2.6%.

  • In February, lending activity notably improved in Professional Services (+0.9%), Real Estate (+1.1%), and Retail Trade (+1.1%). lending activity is down in Accommodations (-3.7%), Finance & Insurance (-1.4%), and Arts, Entertainment, & Recreation (-1.4%).
  • The Equifax Small Business Delinquency Index (SBDI) for loans 31–90 days past due declined 10 basis points in March and is now 22 basis points below its year-ago level. The SBDI for loans 91–180 days past due declined 3 basis points in March but is up 17 basis points year-over-year.
  • Defaults declined 11 basis points in March to 3.11%% (their lowest level since June). However, defaults remain 72 basis points above March 2020 levels.

  • Delinquencies decreased in all six tracked industries in March for the second consecutive month. The Retail sector is now the only tracked industry with delinquencies above year-ago levels.

Click here to read PayNet’s full report.