Month: January 2012

Business Credit Continues to Improve

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Experian said its Q4 Business Benchmark Report showed general improvement in business performance in most categories quarter over quarter, while metrics remained negative from a year-over-year perspective.

Risk scores remained relatively flat across all industry groups and geographic regions. The largest businesses (those with more than 1,000 employees) showed the greatest quarter-over-quarter improvement (2.2%) but the largest decline (14.7%) year over year.

The percentage of dollars delinquent has remained relatively flat quarter over quarter, with the exception of larger businesses (those with 250 or more employees) that have shown significant improvements, reducing their debt by as much as 11%. Performance in this category varies quarter. Notably, midsize businesses (those with 250 to 499 employees) saw the greatest positive change, improving by 35.9%, according to the report.

The general stabilization and signs of improvement seen in Q4 are encouraging. No matter what the business size, industry or geographic region, having a strong risk score, paying bills on time and reducing delinquent debt are important elements to achieving a positive business profile. STRADA’s solutions are designed to help build and maintain the positive credit profile critical to a business’s success.

Contact your account manager today to hear about STRADA’s new products for 2012. Profitability and success is just around the corner.

Business Betting on the Future…BIG!

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The PayNet Small Business Lending Index, which measures the overall volume of financing to small businesses, surged 10.2 points to 106.4, the highest level since February 2008. The index was up 18 percent from November 2010.

We are entering a new phase of the business cycle. Businesses are betting on the future with increased investment spending.

PayNet tracks borrowing by millions of small U.S. businesses and provides risk-management tools to the commercial lending industry.  The survey adds to other data suggesting the economy gathered momentum in the final three months of 2011, which should help it to better handle the headwinds from the debt crisis in Europe and fights over budget policy in Washington.

Fourth-quarter economic growth is seen exceeding a 3 percent annual pace, an
acceleration from 1.8 percent in the third quarter.  PayNet’s index has some leading correlation with gross domestic product, preceding changes in the overall economy by two to five months.

The surge in borrowing tells us there will be growth for at least the next quarter.  There is underlying strength in the economy.  While Europe’s fiscal troubles appear not to have affected the flow of credit to small businesses, they pose a big threat to the economy’s growth prospects in 2012. Added to that is the uncertainty over fiscal policy in the United
States.

The survey also found that small businesses are getting better at managing their debt, with loan delinquencies continuing to drop.  Accounts in moderate delinquency, or those behind by 30 days or more, dropped five basis points to 1.50 percent in November. Those behind 90 days or more in payments, or in severe delinquency, slipped 1 basis point to 0.39 percent. Accounts 180 days or more, or in default and unlikely ever to be paid, fell six basis points to 0.58 percent.

We are now in this new phase of growth and low risk. The key question is how long is this phase going to last?  If these trends continue (which is likely), rates will be rising soon.  Contact me now to find out how you can take advantage of these record low rates.