Small Business Loan Defaults Expected to Peak Next Year

January 6, 2025

Delaney Sexton
Contributing Editor

Small Business Loan Defaults Expected to Peak Next Year

Nationwide, past-due small business loans have been on the rise. The small business delinquency rate hit 1.78% in November, up 6 basis points from last year. Additionally, small business defaults have spiked by 49 basis points in the last year, bringing the default rate to 3.40%. Florida has been struggling with defaults the most, with the small business default rate being 4.72%. In comparison, North Dakota has the lowest default rate in the country at 2.01%.

It is not all bad news because small business defaults fell for the first time in 2.5 years from October to November 2024. Looking ahead, the default rate is projected to continue declining to 3.19% next year. The northern states are especially expected to see improvements, while the southern and western states may continue to face higher risks.

Source:
PayNet Indices