Experian/Moody's Analytics Small Business Credit Index shows small
businesses faced significant challenges in Q3 that will continue
through most of 2013
COSTA MESA, Calif.,
Nov. 20, 2012 /PRNewswire/
-- Experian®, the leading global information
services company, today announced that an increase in severely
delinquent account balances and slower consumer spending growth
posed a significant challenge to small businesses that will likely
continue throughout the rest of 2012 and most of 2013.
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"Small businesses remain under financial pressure, as the
broader economy continues to grow slowly and concerns about the
nation's daunting fiscal challenges mount," said Mark Zandi, chief economist at Moody's
Analytics. "Businesses are reluctant to take on new credit, and
severely delinquent credit remains uncomfortably high. It is
encouraging, however, that early-stage delinquency is declining and
that credit scores are holding up. Credit conditions should improve
if the president and Congress are able to reasonably address our
fiscal problems."
According to the latest Experian/Moody's Analytics Small
Business Credit Index, the credit quality measured by the Small
Business Credit Index began deteriorating in Q3 after four
consecutive quarters of improvement. Findings from the report
showed that while 30- and 60-day past-due balances have improved,
those that are considered severely delinquent (more than 90 days
past due) have not improved after climbing 11.4 percent during the
first three quarters of last year.
"Having a high level of severe delinquency is as troubling for a
small business as it is for a consumer," said Allen Anderson, president of Experian's Business
Information Services. "Making timely payments and reducing
delinquent debt are critical to improving a business's credit
profile, making it possible for the business to achieve positive
growth. When continually faced with a large amount of debt,
businesses can be forced to make the same tough decisions that
consumers do, except these decisions can impact others in terms of
employment or salary adjustments."
Additional findings from the Q3 report show that the
presidential election results will likely ensure the survival of
the Affordable Care Act, which may pose another challenge for some
small businesses. The report shows that while the Affordable Care
Act will have little impact on some companies, those businesses
with 50 to 100 employees could face fines of up to $2,000 per worker if they fail to comply with the
law.
When looking at measures of business health, the Q3 report found
that the average commercial risk score (57.1) remained stable
across geographic regions despite the disproportionate regional
effects associated with the slowing global economy. Additionally,
the report found that U.S. businesses paid their bills an average
of 7.4 days beyond contracted terms in September 2012, the same as during the second
quarter. However, when compared year over year, average days beyond
terms has increased by 2.5 percent.
To receive a copy of the full Experian/Moody's Analytics Small
Business Credit Index report, please visit
http://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 http://www.experian.com/b2b.
About Experian
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.
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.
Contact:
Roslyn Whitehurst
Experian Public Relations
1 714 830 5578
roslyn.whitehurst@experian.com
Twitter: @RozWhitehurst
SOURCE Experian