Experian/Moody's Analytics Small Business Credit Index shows small-business credit conditions deteriorate as delinquency rises and personal income growth slows
COSTA MESA, Calif., Feb. 20, 2013 /PRNewswire/ -- Experian®, the leading global information services company, today announced that the Experian/Moody's Analytics Small Business Credit Index tumbled in Q4 2012, falling 6.8 points to 97.3 from 104.1 in the previous quarter. This is the second consecutive quarterly decline and is the index's lowest reading since Q3 2011. Findings from the report also show that small-business credit quality deteriorated considerably in the quarter, due to a rise in delinquent debt and a slowdown in personal income growth pulling retail sales lower and hurting small-business revenues.
"Small-business credit quality weakened at the end of last year, as the Midwest drought, Superstorm Sandy and cuts in government spending weighed on the economy," said Mark Zandi, chief economist at Moody's Analytics. "Small businesses continue to struggle to meet their financial obligations. However, it is encouraging that credit appears to be growing again for the first time since the recession. More freely flowing credit to small businesses should support more investment and hiring and reinforce the broader economic recovery."
Highlights from the report also show small firms were struggling to pay down delinquent debt. Balances less than 60 days past due rose nearly 20 percent in the quarter, overshadowing a slight decline in those considered severely delinquent (more than 90 days past due). Additionally, nearly all of the increase seen in delinquent debt is a result of firms falling behind on payments on which they were previously current.
"Paying down existing delinquent debt and ensuring future bills are paid on time are critical components to a business's success," said Allen Anderson, president of Experian's Business Information Services. "High levels of delinquency can negatively impact a business's credit, making it difficult to obtain favorable loan and other business terms, which are critical to a business' success."
To receive a copy of the full Experian/Moody's Analytics Small Business Credit Index report, please 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 31 March 2012 was US$4.5 billion. Experian employs approximately 17,000 people in 44 countries and has its corporate headquarters in Dublin, Ireland, with operational headquarters in Nottingham, UK; California, US; and Sao Paulo, Brazil.
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