Commercial Pulse Highlights | 10.29.2024
Welcome to our October 29th, 2024Commercial Pulse Reportpreview! 📊 In addition to current macroeconomic indicators, in this week’s report we take a closer look at Fintechs and the credit profiles of the businesses that utilize them. Since 2018, the fintech industry has experienced extraordinary growth, fundamentally changing how businesses access and manage financial services. According to our latest Commercial Pulse Report, fintech has grown by over 140% in just a few short years, with the number of fintech companies increasing by 70% between 2019 and 2020 alone. Today, North America dominates the global fintech market, accounting for 34% of its total share.
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Key Takeaways:
- Explosive Growth: The fintech industry has grown by over 140% since 2018, with a 70% increase in the number of fintech companies from 2019 to 2020.
- North American Dominance: North America accounts for over 34% of the global fintech market, making it a key player in the industry’s expansion.
- Innovative Solutions: Fintech companies have transformed traditional financial services with digital solutions in areas like payments, lending, personal finance, and investment management—led by apps like Venmo, Cash App, and Apple Pay.
- Increased Credit Activity: Businesses using fintech financing are 270% more credit-active than those relying on traditional financing, with higher inquiries, trades, credit lines, and balances.
- Higher Risk: Despite increased access to capital, fintech-financed businesses exhibit higher delinquency rates and lower credit scores, presenting added risks for lenders.
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The September index marks the first increase since April 2026 September 2026 Index Value (Sep): 41.3 Previous Month: 38.2 MoM: +3.1 YoY: +0.2 (Sep 2025 = 41.1) The Experian Small Business Index™ increased by 3.1 points to 41.3 in September, which is on par with September of last year. This marks the first increase in the score since April 2026. Small business and business owner risk showed mixed signals in September. Business owners were able to originate more trades and the utilization on their late delinquency trades fell, both positive signs of improving credit risk. They also had more emerging businesses establishing credit than in the previous month. While owners’ consumer trades had higher 31+ day delinquency rates and a higher 61+ day delinquency rate on revolving trades, those values were nearly identical to this time last year. There were signs of increased risk in small business owners’ commercial trades with increases in both commercial trade utilization and 91+ day delinquency rates. On the macroeconomic side, GDP is strong and unemployment continues to be low. The advanced estimate of annualized GDP for the third quarter was 3.4% and unemployment was up slightly from 4.1% in August to 4.2% in September. Inflation continues to be the main challenge in the economy, with headline inflation at 3.7%, up from 3.4% in August, driven largely by energy costs. While fuel prices decreased slightly over the last month, prices for regular and diesel fuel are up 40% and 73%, respectively, from a year ago. These high costs are challenging for both small businesses and small business owners. New businesses continue to form at a very high rate, with nearly 535K new businesses launched in September, well above the historical average. The improvement in the Experian Small Business Index and the improving risk metrics for small business owners’ consumer trades suggest the lending market remains healthy for small businesses. Explore Experian Small Business Index Related Posts
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The Experian Small Business Index™ declined 9 points to 38.2 in August, which is nearly level with last year at this time.
