A new report from the Consumer Bankers Association (CBA) and the Small Business Financial Exchange (SBFE) reveals some promising trends for small businesses.
The report – the Q1 2022 CBA-SBFE Small Business Lending Trends – found that new account growth among small businesses is up and now exceeds pre-pandemic levels. This trend indicates that small businesses are no longer employing more conservative pandemic-related spending tactics and instead are preparing for growth.
The analysis also revealed that loan delinquencies trended lower for most account types in the first quarter, continuing a downward trend seen over the past five quarters. In addition, the report found that credit utilization remained fairly flat overall but is anticipated to trend upwards in the months ahead. Further, charge-off rates, or the number of loan defaults, declined for all account types in the quarter. Specifically, unsecured account types have leveled off after higher losses seen at the height of the pandemic.
Despite the waning economy, these trends all point to a stable small business ecosystem. The report said that external factors, including rising interest rates, will play a major role in whether this positive trend continues through the rest of the year.
The CBA-SBFE Small Business Lending Trends analysis is released quarterly, examining delinquencies, credit utilization, and credit utilization by account type and charge-off rates. The data is collected from SBFE members on small businesses and their payment performance on commercial credit accounts.