SBA Hot Topic Tuesday – Small Business Default and Delinquency Rates Improve from 2021

July 26, 2022

Delaney Sexton
Contributing Editor

SBA Hot Topic Tuesday – Small Business Default and Delinquency Rates Improve from 2021

• PayNet’s Small Business Lending Index showed that the volume of new commercial loans and leases decreased 1.6% in the month of May when compared to May 2021.
• Texas is expected to have higher levels of investments, but other major states are revealing the opposite (California, Florida, New York).

• The Small Business Delinquency Index measures the percentage of loans to small businesses that are more than 30 days but less than 91 days past due. Currently, 1.22% of small business loans were delinquent. This index decreased in May 2022 compared to the same time last year.

• Overall, there is less risk involved in small business loans across the country except for the southeast portion of the country along with Missouri and Illinois.

• The Small Business Default Index also improved from May 2021 to May 2022. PayNet found that 1.74% of loans and leases to small businesses have defaulted in the past 12 months.
• Similar to the Delinquency Index, there is a lower or neutral risk of small business loan defaults in every state except New York.

• Their outlook for the commercial loan default rate for businesses across the United States predicts that the default rate will rise slightly from their previous quarter forecast.

• PayNet predicts that Texas and Florida will have a higher loan default rate in the future. California should see a slight increase in risk, and New York’s default rate is expected to improve.

Source:
PayNet Small Business Insights