CBA, SBFE report examines positive impact of relief, assistance programs on delinquency, credit trends

The Consumer Bankers Association (CBA) and Small Business Financial Exchange (SBFE) have released a report determining that multiple rounds of federal relief and lender assistance programs have had a positive impact on both delinquency and credit utilization rates.

© Shutterstock

The Small Business Lending Trends analysis focuses on the second quarter of 2021, providing a breakdown of credit information for the nation’s small businesses, particularly varied rounds of federal relief and lender assistance programs.

“We are seeing reasons for optimism in the most recent quarters,” the CBE-SBFE Small Business Lending Trends authors noted in the report’s overall observations. “New account as a percentage of all accounts reached pre-pandemic levels in early 2021 and has continued to increase until the end of Q2. This indicates that small businesses are obtaining credit facilities which often indicates that they are planning for growth. The data also show a slight increase in utilization for commercial card accounts during the 2nd quarter of this year. This type of change also typically signals businesses preparing for growth in revenue. As a whole, the current state of the small business ecosystem may be described as healthy but constrained.”

The report determined that delinquency continued to decline for all account types in the second quarter of 2021. It is currently at its lowest point in the analyzed period for all account types; credit utilization rose from the first quarter of 2021. Officials attributed the increase to greater utilization on commercial cards; and charge-off rates fell during the second quarter of 2021 concerning all account types – except term loans.

The report provides data on delinquencies, credit utilization, and credit utilization by account type, with the data used to compile the breakdown, including numbers collected from SBFE members regarding small businesses and payment performance on commercial credit accounts.