Small Business Credit Insights

Happy New Year! The burning question for 2023 is whether the U.S. economy will fall into recession. A robust 2022 labor market has been a major factor in staving off recession culminating with a low unemployment rate of 3.5% in December. The number of people in the U.S. labor force surpassed pre-pandemic levels despite lower participation rates, indicating fewer job seekers. This can be explained in part by the increase in retirement of employees due generally to an aging population choosing to retire from the workforce during Covid. Over the past year, with higher demand for labor, easing of health concerns of the pandemic, financial pressure from inflation and 2022 financial markets experiencing their worst performance in 15 years, people are re-entering the labor force and the “unretirement” rate is on the rise. Individuals are returning to the work force in two forms; as employees, and as business owners, as new businesses continue to open at a rapid pace. New businesses continue to account for a growing portion of commercial trades with small businesses (under 10 employees) accounting for over 80% of new commercial credit account originations. New small businesses still require capital to operate however with inflation, high interest rates and decreases in consumer (sole proprietor) and commercial credit scores, average loan amounts are decreasing, driving commercial credit delinquencies up 95% year-over-year for businesses with fewer than 10 employees. What I am watching: In December, wages declined for the first time in almost two years, indicating that going forward, labor may not drive inflation to the same extent as before. When the Federal Reserve meets at the end of January, I will be watching whether interest rates are raised, or the slowing of the labor market is considered a positive sign for slowing inflation. The higher delinquencies and lower credit scores are pointing to a continued tightening of the commercial credit markets thereby making access to necessary capital more difficult and expensive. This negative pressure could stifle new business openings and increase business closures. Download your copy of Experian's Commercial Pulse Report today. Better yet, subscribe so you'll always know when the latest Pulse Report comes out. Subscribe Today

The advanced Q1 2023 GDP numbers show that the U.S. economy grew an annualized 1.1%, down from 2.6% in Q4 2022.

Labor market gives the Fed cover to keep hiking Experian Business Information Services and the economists at Oxford Economics have just released the Q3 2022 Main Street Report. The report brings deep insight into the overall financial well-being of the small-business landscape, as well as providing commentary around what specific trends mean for credit grantors and the small-business community. Report Overview Sustained consumer spending and strong job market performance have perpetuated U.S. small business health and positive market sentiment. The third quarter highlighted open and growing commercial lending markets, inclusive of all tiers of credit risk, even as measured commercial delinquencies returned to pre-pandemic levels. Signals in the financial market point to a heightened risk of a more significant U.S. economic slow-down in 2023, as consumers change spending behavior as affordability tightens and personal cashflows are challenged first in the lower income segments. Download Report Join us for the Q3 Quarterly Business Credit Review Mark your calendars for December 6th! Experian and Oxford Economics will present key findings in the latest Main Street Report for Q3 2022 during the Quarterly Business Credit Review. Ryan Sweet, Oxford’s U.S. Chief Economist will share his take on Experian’s most recent small business credit data and a macroeconomic outlook for the coming quarter. Brodie Oldham, Experian’s V.P. of Commercial Data Science, will cover commercial credit trends.

Heading into the holiday season, we'll see if consumers continue to spend at high levels, or if higher prices, higher interest rates and lower savings create a drag on sales.

Mark your calendars! Experian and Oxford Economics will present key findings in the latest Main Street Report for Q3 2022 during the Quarterly Business Credit Review. Ryan Sweet, Oxford’s U.S. Chief Economist will share his take on Experian’s most recent small business credit data and a macroeconomic outlook for the coming quarter. Brodie Oldham, Experian’s V.P. of Commercial Data Science, will cover commercial credit trends. Our Presenters Brodie Oldham, V.P. Commercial Data ScienceExperian Ryan Sweet, U.S. Chief EconomistOxford Economics Q3 2022 Main Street Report The Q3 2022 Experian/Oxford Economics Main Street report will release at the end of November. If you are not already subscribed to thought leadership updates, be sure to sign up for updates on our Commercial Insights Hub. Event Details Date: Tuesday, December 6th, 2022Time: 10:00 a.m. (Pacific), 1:00 p.m. (Eastern) Why you should attend: Leading Experts on Commercial and Macro-Economic TrendsCredit insights and trends on 30+ Million active businessesAsk our panel questions in real-timeIndustry Hot Topics Covered (Inclusive of Business Owner and Small Business Data)Commercial Insights you cannot get anywhere elsePeer Insights with Interactive Polls (Participate)Discover and understand small business trends to make informed decisionsActionable takeaways based on recent credit performance Save My Seat

We are pleased to announce the publication of our Fall 2022 Beyond the Trends report. The Sales are coming!! Small businesses have been building inventory over the last year driven by fears that the global supply chain could break down at any moment. This anxiety created an environment of pre-ordering behavior intended to elevate the worry felt during the height of the pandemic that their business would fail not due to a lack of shoppers, but an empty shelf. Global economic environments change quickly, and our world is seeing heightened inflation. This increase in the price of goods and services is leading to softened consumer demand. Will holiday sales keep small business afloat before consumer behavior changes. Tough challenges for newer businesses and lenders Forty percent of small business have been operating for less than 1 year. These new businesses will be challenged by a tightening credit market, rising costs, and softening consumer demand. Commercial lenders are originating 13% less high risk subprime accounts since the 2021 even as through the door high risk inquiries have increased by 59%. Average credit lines on new commercial originations dropped 3% since the beginning of the pandemic as lenders look for growth while limiting exposure. In Q22022 those lines rose 1.4% as 40% less small businesses were accessing commercial credit. Download Fall 2022 Beyond the Trends Report

Experian and Oxford Economics have just released the Q2 Main Street Report. it offers a unique view of credit performance on millions of small businesses.

Mark your calendars! Experian and Oxford Economics will present key findings in the latest Main Street Report for Q2 2022 during the Quarterly Business Credit Review for Q2 2022. Kathy Bostjancic, Oxford's U.S. Chief Economist will share her take on Experian's most recent small business credit data and a macroeconomic outlook for the coming quarter. Brodie Oldham, Experian's V.P. of Commercial Data Science, will cover commercial credit trends. Q2 2022 Main Street Report The Q2 2022 Experian/Oxford Economics Main Street report is expected to release on August 23rd. If you are not already subscribed to thought leadership updates, be sure to sign up for updates on our Commercial Insights Hub. Mark Your Calendar Quarterly Business Credit Review Webinar Date: Wednesday, September 7th, 2022 Time: 10:00 a.m. (Pacific), 1:00 p.m. (Eastern) Why you should attend: Leading Experts on Commercial and Macro-Economic Trends Credit insights and trends on 30+ Million active businesses Ask our panel questions in real-time Industry Hot Topics Covered (Inclusive of Business Owner and Small Business Data) Commercial Insights you cannot get anywhere else Peer Insights with Interactive Polls (Participate) Discover and understand small business trends to make informed decisions Actionable takeaways based on recent credit performance Register To Attend

Experian has released the Summer 2022 Beyond the Trends report, our deep dive on the small business economy based on our commercial small business insights.