Experian/Moody's Analytics report shows small-business credit quality continues to improve as credit balances rise and delinquency rates fall
COSTA MESA, Calif., Nov. 5, 2013 /PRNewswire/ -- Experian®, the leading global information services company, today announced that due to a rise in credit balances and a decrease in delinquency rates, small-business credit quality continued to show significant improvement in Q3 2013. According to the most recent Experian/Moody's Analytics report, the Small Business Credit Index rose 2.3 points to 118.5, up from 116.2 the previous quarter. This notes the index's third consecutive quarterly improvement, and its second consecutive record-breaking mark.
"Small businesses are getting their finances in order. Lower delinquency and stronger credit growth bode well," said Mark Zandi, chief economist at Moody's Analytics. "It won't be a straight line up for small businesses, and the recent government shutdown hurt, but their prospects are improving."
Highlights from the report show that credit growth is strong and is growing at a near double-digit level. While total outstanding balances have risen at their fastest rate in two years, delinquency rates have fallen at a consistent pace. In Q3 2013, only 10 percent (the smallest percentage since the recovery began) of outstanding small-business credit balances were past due, down 0.7 percent since Q3 2012.
"For the last year, we've seen significant improvements in small-business credit conditions. The reduction in past outstanding balances and improved payment performance by small businesses has provided them with the ability to increase credit balances in the third quarter," said Joel Pruis, Experian's senior business consultant. "Moving forward, it is imperative that small businesses maintain the discipline demonstrated over the past several quarters. The ability to build and maintain a strong credit profile will help them obtain the appropriate funding to uncover new growth opportunities."
From a regional perspective, the report shows that small businesses in the West continued to have stronger credit profiles than their Eastern counterparts. For example, small businesses in Utah displayed strong credit performances, as past-due balances for businesses comprise a mere 1.1 percent of their total balances. Conversely, small businesses in Florida have shown the weakest credit performance, as nearly 25 percent of all balances are paid beyond contracted terms.
To receive a copy of the full Experian/Moody's Analytics Small Business Credit Index report, visit www.experian.com/SmallBusinessCreditIndex.
About the Experian/Moody's Analytics Small Business Credit Index
Experian joined forces with Moody's Analytics, a leading independent provider of economic forecasting, to create a business index and detailed report that provides insight into the health of U.S. businesses. The Experian/Moody's Analytics Small Business Credit Index is reported quarterly to show fluctuations in the market and discuss factors that are impacting the business economy.
About Experian's Business Information Services
Experian's Business Information Services is a leader in providing data and predictive insights to organizations, helping them mitigate risk and improve profitability. The company's business database provides comprehensive, third-party-verified information on 99.9 percent of all U.S. companies. Experian provides market-leading tools that assist clients of all sizes in making real-time decisions, processing new applications, managing customer relationships and collecting on delinquent accounts. For more information about Experian's advanced business-to-business products and services, visit www.experian.com/b2b.
Experian is the leading global information services company, providing data and analytical tools to clients around the world. The Group helps businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. Experian also helps individuals to check their credit report and credit score, and protect against identity theft.
Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Total revenue for the year ended March 31, 2013, was US$4.7 billion. Experian employs approximately 17,000 people in 40 countries and has its corporate headquarters in Dublin, Ireland, with operational headquarters in Nottingham, UK; California, US; and São Paulo, Brazil.
For more information, visit http://www.experianplc.com.
Experian and the Experian marks used herein are service marks or registered trademarks of Experian Information Solutions, Inc. Other product and company names mentioned herein are the property of their respective owners.
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