Experian has just released our Summer 2022 Beyond the Trends report. As I did the analysis for this release I imagined the crack of a starter pistol for the start of an intense race. Small business owners have been in a sprint to get new ventures up and running. Some businesses are breaking free from the grips of the pandemic and racing to grow and strengthen their business before the next big event. That big event is closer than some would have hoped. Higher prices are already impacting customer behavior. That means more cash flow volatility throughout 2022 for small businesses. Here are a few insights from the report, you can find a link on this post to download the full report.
Strong performance for small business growth in Q1 2022
Lenders and creditors monitor commercial portfolio performance as inflation, and other headwinds change how consumers and businesses spend and invest in the next 12 months. In addition, businesses seek more private credit as capital reserves from stimulus dwindle, and additional stimulus is unlikely as the Federal Reserve moves more aggressively to slow U.S. economic growth.
Unsecured commercial credit increases in Q1 2022
Orders and inventory demand are up
Manufacturers are working hard to cash in on higher prices and borrowing to deliver in a high-demand market. Wholesalers and retailers are stockpiling inventory to prevent shortages and the risk of disenchanted customers. Year over year delinquencies in these supply chain-focused businesses have doubled as they struggle to keep up.
U.S. new business applications remain elevated through the first quarter
New small business creation remains elevated in the U.S. as a strong economic environment, and elevated consumer spending creates space for emerging ventures to gain a foothold and sprint to become a stable viable business.