Experian and Moody’s Analytics have just released the Q3 2021 Main Street Report. The report brings deep insight into the overall financial well-being of the small-business landscape and offers commentary on business credit trends and what they mean for lenders and small businesses.
Labor shortages, wage pressure, and supply chain issues challenge small businesses
Small business credit performance was mixed in the third quarter as businesses dealt with the COVID-19 Delta variant. Early-stage delinquency rates rose modestly while late state delinquency and bankruptcy rates fell decisively.
With daily COVID cases falling, demand for goods and services should rise in coming quarters. Downside risks are concentrated on the supply side with businesses struggling to hire workers and dealing with supply chain stress.
Early-stage delinquency rates rose in the third quarter with servicers reporting that 1.27% of small business credit balances were 31-90 days past due. While higher than the second quarter’s 1.19% rate, performance was only slightly worse than a year ago and significantly better than the pandemic high of 1.66%.
Perhaps more notable was the sharp drop in late-stage delinquency, with 1.92% of balances reported as being more than 91 days past due.
Supply chain issues are impacting both the availability and price of key inputs. Nowhere is this more apparent than in the semiconductor industry, where bottlenecks have shut down the manufacture of entire carlines.
If you would like to get the full analysis of the data behind the latest Main Street Report, watch our Quarterly Business Credit Review webinar. Just scan the code or go to the short link and remember to download your copy of the latest report.