Small business conditions were on the upswing at the start of 2017, according to the Experian/Moody’s Analytics Main Street Report. Businesses are reporting healthy sales, and are investing and hiring strongly. Their finances are also improving, as fewer businesses are having difficulty paying their bills on time.


Small-business delinquencies started the year off right. Both the 30- and 91+-days past-due categories declined in the first quarter, while the 60- and 90-day buckets were nearly unchanged. This continues the trend established over the last two years and was to be expected, given the continued growth in the economy.

Other positive indicators included increases in credit balances and credit limits.

8.8% | Increase in business credit balances
4.5 % | Increase in credit limits

Reasons for the increase in borrowing by small businesses

  • Increase in consumer confidence
  • Near-full employment rate
  • Increased incomes
  • Increased demand for goods and services provided by small companies

Small businesses could use more credit

“While we see that delinquencies are declining and credit limits and utilization rates among small-businesses owners are increasing, we also understand that small businesses don’t have adequate credit to expand at their desired pace. If economic conditions continue to improve this year, we should see financial institutions start to increase credit availability for small-business owners,” said Gavin Harding, senior business consultant for Experian.

Agriculture remains resilient

While credit performance for small businesses across most industry groups showed improvement in the first quarter, the agriculture industry has remained surprisingly resilient despite four years of declining income for farmers.

Weakness in other verticals

Performance in the manufacturing, transportation and public administration industries, however, was not as strong. Additionally, while the retail industry has seen improvements over the last two years, the segment continues to have the highest severe delinquency rates.

“Small businesses are very upbeat, as they should be given their improving financial condition,” said Mark Zandi, chief economist for Moody’s Analytics. “They are borrowing more and paying their obligations back on time. If small businesses continue to do well, so too will the broader economy.”

istock