Small Business Defaults Up 84 Basis Points From Last Year
July 29, 2024
Delaney Sexton
Contributing Editor
Small Business Defaults Up 84 Basis Points From Last Year
Equifax’s Main Street Lending Report for June 2024 shared that small business lending activity in April improved. Compared to the month before, lending was up 6.1%. From the year before, small business lending increased by nearly 2%. The three-month moving average also improved by half a percentage point from the month before, but it is slightly below the level it was a year ago.
Small business defaults were at 3.26% in April according to Equifax. It was only a minor increase from March, but compared to March 2023, the default rate has increased by 84 basis points. In April, 1.69% of small business loans 31-90 days past due which is no change from March. The 31-90 days delinquency rate rose 10 basis points from April 2023. Equifax reported that 0.63% of loans are 91-180 days past due. These loans saw small increases compared to the month before and the year before.
During April, small business lending in the construction industry hit a series high. Small business lending increased by 8% from April 2023 and increased by 0.5% from March 2024. Delinquencies and defaults also increased in the construction industry, but this is occurring across all industries.
The agriculture industry had a difficult month in April. Lending fell by 1.1% from the month before. Compared to the year before, lending dropped by almost 11% in the agriculture industry. In the last year, delinquencies increased by 22 basis points and defaults increased by 44 basis points.