In today’s digital economy, businesses face a dual challenge: onboarding legitimate customers quickly while keeping fraudsters out. As commercial fraud becomes more sophisticated, the need for integrated fraud and credit scoring has never been more urgent. Scoring systems that unify these two dimensions—creditworthiness and fraud risk—are transforming how financial institutions, insurers, and commercial lenders evaluate new accounts and protect their portfolios. Why does scoring for credit and fraud really matter for B2B creditors? The surge in small business formation, artificial intelligence (AI) adoption and mutating forms of fraud have reshaped the risk landscape for business creditors in a myriad of ways. The spike in new business formation since 2020 is a trend that’s expected to remain permanently elevated, with the adoption of AI as a catalyst for small business startups and growth. U.S. Census Bureau data shows that since July 2020, a seasonally adjusted average of 441K new businesses opened each month, 51% higher than the pre-pandemic 2018–2019 monthly average. In July, 2025, 471K new businesses launched, an increase of 13K (2.9%) from June 2025. The trend of new small business formation remains elevated. This could be a result of lower startup costs from AI adoption, allowing new businesses to scale with less expense. As AI has scaled and evolved, fraud in the business arena has scaled too. Most small businesses lack credit history, and traditional risk models struggle to evaluate these businesses, let alone check for fraud signals. Traditional models are no longer sufficient to evaluate this evolving risk environment, calling for a more holistic approach to risk evaluation. How does bridging the gap in credit demand create a path for fraudsters to exploit bigger payouts? • 46% of small business loan applications showed signs of first-party fraud (e.g., misrepresented revenue or business details).1• AI-driven scams are projected to cause $40 billion in losses by 2027.1• 80% of fraud events now occur via digital channels such as online or mobile banking.1 Businesses that have been active for less than 2 years account for a growing portion of newly opened commercial accounts. They averaged 27% of new accounts in 2020 and grew to over 40% of new accounts in 2023 and 2024.Experian, Commercial Pulse Report, 2025 The data from Experian’s Commercial Pulse Report, underscores a critical truth: traditional credit scoring alone is no longer sufficient in determining whether a business customer is creditworthy. Fraud scoring adds a vital layer of insight, helping to predict the likelihood of early payment defaults, identify synthetic identity elements, and prevent business impersonation before they become costly problems. Creating a unified approach to scoring applicants for both credit and fraud during the account onboarding process, or at other key milestones, is a vital strategy to identify creditworthy business customers. Experian’s Fraud Investigation Report, available within BusinessIQ 2.0, exemplifies the power of combining fraud and credit scoring. It integrates three best-in-class tools:• Multipoint Verification: a next-generation business verification tool powered by blended credit bureau data and non-traditional sources to calculate risk with explainable, machine-learned models, to provide creditors with better insights on their commercial customers.• Business ID Theft Score™: this score leverages the breadth and depth of Experian’s 28M+ business records to reliably predict the probability of identity theft and third-party fraud in commercial accounts to help streamline application processing.• Commercial First-Party Fraud Score: a machine-learned model that uses blended consumer and commercial attributes to deliver an actionable score that reliably predicts the likelihood of first payment default and credit abuse in commercial applications. Together, these scores are combined into one report to provide a holistic view of both the individual and the business entity at account origination. This “one partner, one platform” approach streamlines onboarding and risk evaluation, enabling faster, more confident decisions. Experian’s scoring tools are designed to meet the unique challenges of each industry: Financial institutions and banksThese organizations face high volumes of account applications and must balance speed with security. Integrated scoring helps detect synthetic identities and credit abuse early, reducing exposure to default and fraud losses. FinTech and online lendersOperating in fast-paced digital environments, FinTech firms benefit from real-time fraud scoring that flags suspicious email usage, mismatched business data, and identity inconsistencies—without slowing down onboarding. Insurance providersFraud scoring supports underwriting by identifying high-risk entities before policy issuance. For teams, it provides post-sale fraud indicators that streamline investigations and improve claims accuracy. Merchant cash advance and equipment finance firmsThese sectors often deal with small businesses and startups, where traditional credit data may be limited. Fraud scoring fills the gap by verifying business legitimacy and ownership connections. Manufacturing, construction, and freight logistics firmsThese industries rely heavily on trade credit. Integrated scoring helps differentiate between legitimate businesses and shell companies, reducing the risk of non-payment and fraud. Telecom, energy, and utility providersWith a large customer base and recurring billing, these sectors benefit from fraud scoring that flags anomalies in business identity and payment behavior—helping prevent revenue leakage. Why do data silos within organizations lead to more fraud risk? One of the biggest challenges in fraud detection is fragmentation of data. Risk signals are often scattered across systems, requiring manual reviews and cross-referencing that slow down operations and introduce inconsistencies. Experian’s Fraud Investigation Report breaks down these silos, delivering consistent, actionable insights into a single report that can be compared easily along with the business’ credit report. This not only improves operational efficiency but also enhances the ability to audit and fulfill compliance requirements— a critical need for regulated industries like banking and insurance. How to gain speed in approving new customer accounts and credit terms The ability to quickly approve or deny credit terms is important, especially when evaluating new accounts. Experian’s Fraud Investigation Report can reduce fraud evaluation time by up to 50%, eliminating the need to consult multiple sources or conduct manual searches. Now firms can review trusted information from a single report instead of relying on Google to verify business legitimacy, users get instant indicators like vacant address fields, recent email use across multiple credit applications, and mismatched email age versus company age. These insights are powered by machine-learned models that differentiate between first-party, third-party, and synthetic fraud with high precision. How scoring for both fraud and credit risk can support strategic goals across the entire organization Experian’s fraud and credit scores can deliver a wide range of benefits across the organization. C-suite executives need a comprehensive view of enterprise risk to help make strategic plans that will affect the future of their firm. A combined approach to scoring commercial customers can provide a consistent framework for evaluating fraud and credit risk, supporting strategic decisions and regulatory compliance. Directors or Vice Presidents of fraud and credit are tasked with reducing losses and improving operational efficiency. Integrated scoring helps them identify fraud earlier, reduce manual reviews, and streamline workflows. Finding more efficiencies in these areas can allow firms to hold less cash in reserve for bad debt or enable more budget to be put towards innovation to stay competitive. Analytical, data sciences, or finance executives can benefit from scored data that can be fed into predictive models and financial forecasts, offering laser precise accuracy. With better data that offers unified insights, analytics teams can better segment risk, optimize portfolios, and support data-driven planning. Commercial underwriters and fraud investigation teams can benefit from pre-sale fraud indicators that improve policy accuracy. Investigation teams can use post-sale scoring to investigate claims and detect fraud patterns more efficiently, removing the risk of human error and reducing time spent on each claim. Credit managers and portfolio analysts rely on consistent scoring to assess repayment likelihood and monitor portfolio health. Unified reports reduce ambiguity and support confident decision-making. Procurement and purchasing leaders need to verify supplier legitimacy. Fraud scoring helps ensure that vendors are who they claim to be—reducing supply chain risk. Inconsistent scoring can lead to biased decisions, missed fraud signals, and lost revenue. Experian’s unified report ensures that credit managers receive the same set of insights across every activity, removing ambiguity and supporting confident evaluations. Consistency in data is especially valuable for users less familiar with signs of fraud. Visual design elements can help professionals at any level of seniority making the The proof of the Fraud Investigation Report’s value can be seen within the real-world impact it creates. Experian’s scoring model isn’t just theoretical—it delivers measurable results with 1.6x fraud detection vs. credit scores alone, 80% business verification rate as a standalone solution, and up to 59% fraud capture at a 20% review rate. These metrics demonstrate how combined scoring for fraud and credit within a single report, can dramatically improve fraud detection while maintaining a smooth customer experience. Why do you need a layered B2B credit strategy that checks for fraud? Layered threats require a layered strategy to combat risk, and the most effective defense is multi-dimensional. Using a score for credit risk is just one layer—but it’s foundational. When combined with scoring for fraud signals that include identity verification, behavioral analytics, and orchestration tools, a robust framework that adapts to evolving threats is created. Layered strategies also allow for dynamic friction—applying the right level of scrutiny at the right time. This ensures that legitimate customers enjoy a seamless experience while suspicious activity is flagged for deeper review. The future of fraud prevention lies in automation and predictive intelligence. Experian’s scoring models are built to scale, leveraging explainable machine learned models to continuously improve accuracy and adapt to new fraud patterns. As businesses embrace digital transformation, integrated scoring will become a cornerstone of smart onboarding, risk management, and customer trust. Fraud and credit scoring are no longer separate disciplines—they’re two sides of the same coin. By unifying these insights, businesses can detect fraud faster, make smarter credit decisions, and build resilient portfolios. Experian’s Fraud Investigation Report is leading the way, offering a streamlined, data-rich solution that empowers organizations to act with speed, confidence, and precision. Ready to see it in action? Watch the Demo

Insights from Experian’s September 16, 2025 Commercial Pulse Report This week's Experian Commercial Pulse Report shines a spotlight on one of the most critical yet vulnerable sectors in the U.S. economy: construction. The industry has experienced significant growth over the last seven years, but fresh data reveals mounting signs of financial stress that commercial lenders and Chief Risk Officers should be closely monitoring. Watch the Commercial Pulse Update Construction Growth Reaches New Heights Since 2018, Construction GDP has increased by 53%, reaching $1.34 trillion in Q1 2025. The sector now makes up 4.48% of total U.S. GDP, just below its pandemic-era peak in mid-2020. At the same time, construction employment has rebounded strongly, with more than 8.3 million Americans now working in the sector — a 9% increase over pre-pandemic levels. On the surface, construction appears to be thriving. But a closer look reveals signs of market cooling: Building permits have declined, suggesting future construction volume may slow. Housing inventory has returned to pre-pandemic levels, leading to rising vacancy rates. Material costs — especially for insulation and drywall — remain stubbornly high, placing added pressure on operating margins. These trends reflect a shift in the construction cycle — from expansion to potential contraction — and the financial effects are already showing up in commercial credit behavior. Credit Stress Is Building Experian’s data highlights a credit environment that is tightening for construction businesses: The number of active commercial accounts has plateaued, signaling reduced borrowing activity. Credit inquiries have been rising since late 2021, showing that more businesses are seeking financing — but lenders appear increasingly cautious. The number of new open trades has declined, indicating less credit is being extended even as demand grows. Most notably, delinquency rates are climbing. As shown in the chart above, the 90+ day delinquency rate rose sharply in 2022 and, after a brief cooling period, resumed an upward trend in 2024. As of May 2025, the rate has reached 0.07%, its highest point in several years. This aligns with a broader concern: construction businesses are facing more financial pressure, even as headline indicators remain strong. What This Means for Risk Leaders For CROs, credit strategists, and commercial underwriters, these trends serve as early warning signals. Delinquency rates and inquiry volume should be integrated into portfolio monitoring systems as forward-looking indicators. Underwriting score thresholds may need adjustment for construction-related businesses, especially those showing increased credit-seeking behavior without corresponding trade activity. The broader credit environment is tightening, and construction — historically a cyclical industry — is often among the first to feel the impact of shifting economic conditions. By monitoring these sector-specific metrics in real time, lenders can get ahead of emerging risks before they spread to adjacent sectors like real estate, materials, and heavy equipment. Construction is still contributing significantly to economic growth — but that growth is coming under strain. Rising costs, declining credit access, and increasing delinquencies are creating a complex risk profile that demands close attention. For the full analysis, including all small business credit trends, read the latest Experian Commercial Pulse Report. ✔ Visit our Commercial Insights Hub for in-depth reports and expert analysis. ✔ Subscribe to our YouTube channel for regular updates on small business trends. ✔ Connect with your Experian account team to explore how data-driven insights can help your business grow. Download the Commercial Pulse Report Visit Commercial Insights Hub Related Posts

Commercial Pulse Report | 09/03/2025 The latest Experian Commercial Pulse Report (September 3rd, 2025) gives us a fascinating look at where small businesses stand today. Sure, things are a bit tight right now with lending getting stricter and some credit stress showing up. But zoom out a little, and you'll see something remarkable: small businesses have completely transformed themselves over the past few years. We're talking about one of the biggest shifts in modern business history. Companies that used to move at a snail's pace have become nimble, tech-savvy operations that can pivot on a dime. Watch the Commercial Pulse Update The Economy Right Now: It's Complicated As we mentioned in the Macroeconomic section of the report, the current economic picture presents a complex mix of signals. Inflation sat at 2.7% in July, unemployment remains relatively low at 4.2%, and wages continue to climb. These indicators are largely positive, even as companies moderate their hiring pace. Here's what's encouraging: small business owners are feeling more optimistic. The NFIB confidence levels are actually above the 52-year average—a real turnaround after months of uncertainty. And people are still starting businesses like crazy. We saw 471,000 new business applications in July alone. That tells you something about the American entrepreneurial spirit. The Stress is Real, But So is the Strength Now, Experian's Small Business Index did drop to 32.8 in July—that's nearly 12 points down from the month before. It sounds scary, but it's more about early warning signs. What's happening is that business owners are feeling the squeeze personally. Banks are being pickier about loans, and more people are falling behind on their bills, creating a ripple effect. Add in student loan problems and a job market that's not quite as hot as it was, and you can see why household budgets are getting tight. But—and this is important—small businesses themselves are holding steady. Their loan payments are on track, and all that optimism and new business formation we mentioned? That shows real possibility. The Real Story: Three Chapters of Change Here's where it gets interesting. If you look at the past seven years, small business evolution breaks down into three clear chapters: The Slow Years (2018-early 2020): Back then, most small businesses were still doing things the old-fashioned way, to put it. Maybe they had a basic website, but they were primarily brick-and-mortar operations with everyone working in the office. Change happened, but it was gradual. The Panic Years (2020-2022): Then COVID hit like a freight train. Suddenly, businesses that had been putting off going digital for years had to figure it out in weeks. Contactless everything, working from home, completely changing how they operated—it was sink or swim time. The government threw lifelines to help businesses survive, and amazingly, a ton of new entrepreneurs jumped into the pool. It was chaotic, but it worked. The Smart Years (2023-2025): This is where we are now, and it's pretty impressive. Small businesses aren't just surviving—they're thriving with tools that seemed like science fiction just a few years ago. They're using AI to understand their customers better, running hybrid operations that blend online and offline seamlessly, and many are taking sustainability and cybersecurity seriously. They're meeting customers wherever they are—online, in stores, on social media—and making it feel personal. Go to any Starbucks and see how many customers walk in and pick up their order vs stand in line. The numbers back this up: 38% more businesses established commercial credit between 2018 and 2023. New business formation is still 51% higher than before the pandemic. And here's the kicker—businesses started in 2023 actually look more financially stable than the ones from earlier years. What This Means Going Forward Here's the bottom line: yes, small businesses are dealing with some headaches right now. Credit is tighter, money's a bit harder to come by, and everyone's feeling the economic uncertainty. But these aren't the same small businesses that existed five years ago. They've been through the fire and came out stronger, smarter, and more flexible. They know how to adapt because they've had to do it—fast. For banks, policymakers, and anyone else trying to support small business, the key is remembering that short-term pain doesn't erase long-term progress. We've built a more dynamic, resilient small business ecosystem. This transformation continues to evolve. Recent history has demonstrated that small businesses can adapt more rapidly than traditional models predicted. The next phase of this evolution will likely build on these foundations of enhanced agility and technological integration. For the full analysis, including all small business credit trends, read the latest Experian Commercial Pulse Report. ✔ Visit our Commercial Insights Hub for in-depth reports and expert analysis. ✔ Subscribe to our YouTube channel for regular updates on small business trends. ✔ Connect with your Experian account team to explore how data-driven insights can help your business grow. Download the Commercial Pulse Report Visit Commercial Insights Hub

The Experian Small Business Index™ declined month-over-month by almost 12 points. July 2025 Index Value (Jul): 32.8 Previous Month: 44.7 MoM: -11.9 YoY: -16.8 (Jul 2024 = 49.6) The Experian Small Business Index™ declined in July to 32.8, down 11.9 points. Small businesses still look healthy, but business owners are starting to show some stress in their consumer credit profiles. The primary driver was tighter lending conditions, which reduced approval rates and increased delinquencies for consumers. Pressure has built on the small business owner due to rising student loan defaults and a softer labor market, which is beginning to erode consumer credit health. Inflation has remained even, with slight upticks in some sectors and slight decreases in others. Rent inflation continues a downward trend; it was 3.8% in June, down from 3.9% in May. Producer price inflation was also down 0.4 points to 2.3%, reaching its lowest level since September 2024. Some sectors had inflation rise, with food inflation up slightly from May to 3.0% from 2.9%, overall inflation was up 2.7% in June from 2.4% in May, and core inflation increased from 2.8% in May to 2.9% in June. The savings rate decreased to 4.5% in May, down from 4.9% in April, as consumers continue to spend. Explore Experian Small Business Index Related Posts

Experian Commercial Pulse Report Outstanding student loan debt in the U.S. has reached an all-time high of $1.63 trillion, and the ripple effects are being felt far beyond the personal finance arena. This unprecedented debt burden is now shaping the way many small business owners borrow, manage credit, and maintain financial stability. Watch the Commercial Pulse Update This week, the Commercial Pulse Report reveals a clear and growing link between student loan obligations and small business credit performance. For lenders, policymakers, and business leaders, this is a trend that can’t be ignored. The Scale of the Challenge Student loan balances have surged over 550% since 2003, rising from roughly $250 billion to more than $1.6 trillion in early 2025. Even during the pandemic-era repayment moratorium, when interest was frozen and payments paused, balances continued to grow — albeit modestly, by just 2.9%. Policy shifts, such as the recently enacted One Big Beautiful Bill Act, are set to reshape the student loan landscape yet again — from changes in borrowing limits to the sunset of certain repayment plans. As these changes take effect, they will inevitably influence the personal financial health of millions, including business owners who are navigating both consumer and commercial credit obligations. Student Loan Debt Among Business Owners Experian’s data shows that approximately 5% of business owners currently carry student loan debt — up from 4% in 2019. While that may seem like a small slice of the business population, the growth rate is significant and points to a deeper shift in borrowing dynamics. Also, since 2020, when some federal student loan repayments were forgiven or paused, business owners with student loans have been opening a larger share of new commercial credit accounts. In 2019, they represented 11% of new account openings. By 2025, that share had risen to 14%. This suggests that temporary relief on personal loan payments may have freed up capacity for some entrepreneurs to access additional business credit — a trend worth watching as repayment requirements return in full force. Risk & Performance Differences Our data also shows clear performance gaps between business owners with and without student loans: Delinquency rates are higher for those with unpaid government-backed student loans, especially among newer businesses. In 2023, 4% of new businesses with these loans had a 90+ day delinquency, compared to 3% for owners without student loans. Credit risk scores tell a similar story: owners without student loans average a score of 58, versus 53 for owners with unpaid government loans. Business stability also differs. Owners without student loans tend to have longer operating histories, higher commercial balances, and more active credit accounts — all indicators of stronger credit health. For lenders, this means personal debt load isn’t just a side note; it can be a leading indicator of small business credit behavior and repayment risk. Implications for Lenders & Policymakers As personal and commercial credit health become increasingly interconnected, financial institutions may need to refine their risk models to account for personal debt obligations like student loans. Underwriting: Integrating consumer credit insights into business credit assessments could help identify early warning signs. Portfolio management: Segmenting accounts by student loan status may reveal patterns in repayment behavior and growth potential. Policy considerations: As student loan repayment policies shift, small business access to credit , and their ability to maintain healthy repayment patterns could change in tandem. The $1.63 trillion student loan burden isn’t just a consumer finance story — it’s a small business credit story, too. As more entrepreneurs carry this debt, the link between personal obligations and business performance will only grow stronger. Understanding and monitoring this crossover trend is essential for informed decision-making, whether you’re extending credit, managing a portfolio, or shaping policy. For the full analysis, including all small business credit trends, read the latest Experian Commercial Pulse Report. ✔ Visit our Commercial Insights Hub for in-depth reports and expert analysis. ✔ Subscribe to our YouTube channel for regular updates on small business trends. ✔ Connect with your Experian account team to explore how data-driven insights can help your business grow. Download the Commercial Pulse Report Visit Commercial Insights Hub Related Posts

The Great Recalibration Experian is very pleased to announce the release of the Q2 2025 Main Street Report. Brodie Oldham from Experian Commercial Data Science unpacks insights from the latest Main Street Report. Watch Quarterly Business Credit Review Webinar Main Street Recalibrates for a New Normal U.S. small businesses are demonstrating exceptional adaptability amid a complex post-pandemic economic environment. Inflation remains elevated above 3%, interest rates are steady between 4.25% and 4.50%, and global trade dynamics continue to introduce volatility. Despite these pressures, small firms are showing resilience, driven by improved digital capabilities, disciplined fiscal management, and a steady flow of entrepreneurial activity. In Q2 2025, an average of 447,000 new business applications were filed, with significant contributions from minority and younger founders. The Experian Small Business Index™ held steady, credit conditions remained tight. Traditional lenders continued to restrict approvals, with just 13% of applications approved by large banks. In response, small businesses increasingly turned to fintech and embedded finance solutions for faster, data-driven access to capital. Borrowing behaviors are shifting. The average small business credit card APRs now exceed 25%, firms are transitioning toward installment loans that offer structured repayment terms. Download the latest report for more insight. Download Q2 Main Street Report Related Posts

The experts from Experian reviewed recent small business credit performance. Experian’s Brodie Oldham, VP of Commercial Data Science, and Marsha Silverman, Strategic Analytic Consultant revealed several insights on how small businesses are performing during the Q2 Quarterly Business Credit Review. Inflation was also a big focus of the webinar. Brodie talked about inflation trends and highlighted insights from a recent CFO survey conducted with the Richmond Fed. It says more than 40% of CFOs expect to pass increased costs on to consumers, impacting inflation in both goods and services sectors. Brodie also explored the Federal Reserve's potential actions as inflation rises alongside a softening labor market and strong economy. Will we see a rate cut this year? Marsha Silverman explored the significant increase in new business formations in the United States following the pandemic. Before COVID-19, approximately 300,000 businesses were registering monthly with the US Census, but this number has surged to around 440,000 per month – a 50% increase. This growth is evident across all regions, especially in the southern US, driven by population migration to warmer climates. Additionally, Experian talked about the impact on lending, noting a rise in commercial credit issued to younger businesses within their first two years. Originally Presented:Date: Tuesday, August 19th, 2025Time: 10:00 a.m. (Pacific) / 1:00 p.m. (Eastern) Audience Poll Responses During the webinar we asked the audience the following questions and here is how they responded. Which macroeconomic factor is having the greatest impact on small business credit conditions this year? What actions if any have you taken in 2025 in response to additional tariff ? How are small businesses adapting to tighter credit conditions in 2025? Our Presenters: More reasons to watch: Leading Experts on Commercial and Macro-Economic Trends Credit insights and trends on 30+ Million active businesses 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 Watch On-Demand Related Posts

As temperatures rise across the U.S., so does the nation’s appetite for travel—and the Leisure & Hospitality sector is feeling the heat. In this week's Commercial Pulse Report, we examine how soaring consumer demand intersects with evolving credit conditions for businesses in travel, lodging, and transportation. Travel Rebounds, But the Story Is Mixed By every measure, Americans are traveling in droves. AAA projected over 72 million domestic travelers over the July 4th holiday—setting a record. Meanwhile, Memorial Day travel surged across all transportation types, especially road trips, which saw a 3.0% year-over-year increase. However, despite six new TSA checkpoint records in June, major airlines have cut forward-looking forecasts, signaling a notable shift: travelers are increasingly opting for alternatives like road and rail over the skies. This change in travel behavior has direct implications for how different business subsectors access and manage credit. Infrastructure Drives Commercial Credit Trends The Leisure & Hospitality industry is broad and fragmented—from mega-airlines and hotel chains to small sightseeing operators and independent RV campgrounds. This diversity is reflected in commercial credit data. Businesses with heavy infrastructure needs—like airlines and hotels—tend to carry higher loan and credit line balances. Airlines, in particular, average the highest number of commercial trades, a reflection of their large-scale operations and capital intensity. Hotels also hold sizeable credit, but with a twist. While revenues have rebounded beyond pre-pandemic levels, occupancy rates remain flat due to an increase in room supply from new construction. The hotel pipeline stood at 6,211 projects with over 722,000 rooms as of Q3 2024, signaling sustained investment even amid margin pressures. Rental Cars: High Volume, Higher Risk The rental car sector stands out—but not in a good way. Despite being a key enabler of domestic travel, these businesses exhibit the highest commercial credit risk across the industry. According to Experian’s Commercial Risk Classification, 32% of rental car companies are considered Medium-High to High Risk, compared to less than 10% in categories like air transport and sightseeing. The elevated risk may be due to a combination of factors: fleet acquisition costs, multi-location exposure, and operational disruptions during the pandemic. While credit trades in this segment remain high, inquiries have declined over recent years, possibly reflecting tightening lending standards or constrained demand for new credit. Encouraging Risk Trends—With Exceptions Across the broader Leisure & Hospitality industry, there’s been a decline in commercial credit risk since 2020. The share of businesses classified as Medium-High or High Risk dropped from 11.7% to 8.5% as of April 2025. Most firms now fall into the Medium Risk category—a sign of normalization in the sector. Delinquency rates remain low (under 1%), and the average Intelliscore Plus v2 score has remained stable across most subsectors. Still, credit conditions vary sharply by business type, underlining the importance of nuanced risk assessment in portfolio management. Smarter Credit Allocation Starts with Subsector-Level Insight The summer travel surge is a powerful reminder of the sector’s resilience—but not all players are experiencing the boom equally. For credit professionals and commercial lenders, the latest data from Experian suggests a growing divide: infrastructure-heavy firms are leaning into credit, while high-risk subsectors like rental cars may warrant closer scrutiny. Whether your clients are in air transport or roadside accommodations, understanding these credit trends will be key to navigating the second half of 2025. ✔ Visit our Commercial Insights Hub for in-depth reports and expert analysis. ✔ Subscribe to our YouTube channel for regular updates on small business trends. ✔ Connect with your Experian account team to explore how data-driven insights can help your business grow. Download the Commercial Pulse Report Visit Commercial Insights Hub Related Posts

The Experian Small Business Index™ was stable month-over-month, with a slight decrease to 44.7 in June. June 2025 Index Value (Jun): 44.7 Previous Month: 45.2 MoM: -0.5 YoY: -10.7 (Jun 2024 = 55.4) The index has evened out and remains relatively stable as the economy continues to operate on sound footing. Unemployment remains low and hourly wages continue to increase, and the economy added 147K jobs in June, a slight increase over May. Consumers are optimistic, and sentiment increased to 60.7, up from 52.2 in May. Small business optimism was steady at 98.6 in June, 0.2 points lower than May. Consumers continue their trend of starting new businesses, with 457K launched in June, a 2.2% increase over May. Inflation has remained even, with slight upticks in some sectors and slight decreases in others. Rent inflation continues a downward trend; it was 3.8% in June, down from 3.9% in May. Producer price inflation was also down 0.4 points to 2.3%, reaching its lowest level since September 2024. Some sectors had inflation rise, with food inflation up slightly from May to 3.0% from 2.9%, overall inflation was up 2.7% in June from 2.4% in May, and core inflation increased from 2.8% in May to 2.9% in June. The savings rate decreased to 4.5% in May, down from 4.9% in April, as consumers continue to spend. Explore Experian Small Business Index

As the automotive sector adapts to rising vehicle prices, shifting consumer behavior, and persistent inflation, the ripple effects are clearly visible in commercial credit activity. Experian’s latest Commercial Pulse Report (July 22, 2025) dives deep into the evolving credit dynamics within the auto industry—and one trend is clear: credit access is contracting across nearly every segment. Used Cars Rise, But Credit Lines Fall With the average new vehicle price exceeding \$47,000, many consumers are opting for used cars, priced more affordably at just over \$28,000. This shift has helped drive consistent growth in the used-car market, accompanied by an uptick in business activity and a growing demand for commercial credit. In fact, used-vehicle and aftermarket service providers have seen commercial credit inquiries jump approximately 20% above January 2021 levels. Their credit utilization rate now sits at 32%, reflecting the costs of managing larger inventories and higher parts prices. But unlike traditional signs of financial distress, this trend appears tied more to operational needs than liquidity crunches. Despite the increased appetite for credit, credit limits are shrinking. A Cross-Sector Credit Contraction Across the entire automotive supply chain, from OEMs to aftermarket shops, businesses are receiving smaller commercial credit lines on new originations than in previous years. The declines are significant: OEMs and New-Vehicle Dealers: Average commercial card limits have dropped by \$7.6K, now sitting at \$9.7K compared to \$17.4K in 2022–2023. Used-Vehicle Dealers and Aftermarket Services: Limits have fallen by \$5.8K, from \$13.6K to \$7.8K. Vehicle and Parts Wholesalers: These businesses faced the steepest cut—\$8.9K on average, down from \$18.5K to just \$9.6K. All subsectors experienced over a 40% reduction in average credit lines, signaling tighter lending conditions despite robust business activity in several parts of the industry. Why Are Credit Lines Shrinking? This broad contraction is not purely about borrower risk. In fact, many used-car and aftermarket businesses have maintained steady commercial risk scores, and delinquency rates remain relatively flat. A few critical factors include: Elevated Interest Rates: High financing costs are squeezing margins, especially for OEMs and franchised new-car dealers, where delinquencies are rising. Lenders may be proactively managing exposure. Segment-Specific Risk Trends: OEMs and dealers are facing mounting late-stage delinquencies—91+ DPD rates have nearly doubled since 2022—and their average risk scores are down ~4 points. Economic Uncertainty: Despite stable employment and wage growth, inflation, Fed policy, and geopolitical risk (like tariffs) are prompting more conservative credit practices. Portfolio Diversification: Lenders may be redistributing credit availability to less volatile sectors or industries with higher recovery potential. The Middle Squeeze: Wholesale Distribution Among the three major segments—OEM/New-Car Dealers, Used-Vehicle & Aftermarket, and Wholesale Distribution—wholesalers are caught in the middle. Their delinquency and risk score trends resemble those of OEMs, but their growing credit utilization and inquiry rates mirror the aftermarket segment. This dual exposure to shrinking new car volumes and rising parts demand puts them in a uniquely vulnerable position. What It Means for Credit Managers and Lenders These trends underscore the importance of granular credit monitoring. Treating the auto industry as a single credit risk profile is no longer viable. Subsector segmentation—by vehicle type, service focus, or market exposure—is key to understanding which businesses are truly at risk and which remain stable but under credit strain. For lenders, this is a time to rebalance risk models and align credit policies with real-time sector insights. For businesses, it’s a moment to double down on credit management and strategic planning. Stay ahead with Experian ✔ Visit our Commercial Insights Hub for in-depth reports and expert analysis. ✔ Subscribe to our YouTube channel for regular updates on small business trends. ✔ Connect with your Experian account team to explore how data-driven insights can help your business grow. Download the Commercial Pulse Report Visit Commercial Insights Hub Related Posts

Small Businesses remain resilient amid rate uncertainty and signs of job market weakness May 2025 Index Value (Apr): 45.2 Previous Month: 43.2 MoM: +2.0 YoY: -9.8 (May 2024 = 55.0) Last month’s dip was short-lived as May's economic figures remained strong, showcasing the continued resilience of the U.S. economy. Reduced tariffs, especially on China, eased market concerns amid ongoing trade talks. The unemployment rate remained steady at 4.2% and wages continued to rise. New business starts remained stable at 447K in May, close to the monthly average of 441K since July 2020, and still well above pre-pandemic levels. Consumer sentiment and small business optimism increased after recent declines, though uncertainty still affects these surveys. Consumer sentiment was 98.8 in May, a 3-point increase over April, but 11% lower than a year ago. Inflation news was mixed: overall and food inflation saw slight upticks, while core inflation stayed flat and rent inflation dropped to its lowest since November 2021. The Fed's cautious approach persists, but predictions of a rate cut in the coming months are growing as inflation remains relatively steady and potential signs of job market weakness emerge. Explore Experian Small Business Index

Commercial Pulse Report | 7/1/2025 This week the Experian Commercial Pulse report focuses in on a fascinating paradox in the e-commerce industry that credit and risk management professionals should closely monitor. While online retail revenues continue their upward trajectory—now representing over 16% of total U.S. retail sales and generating quarterly revenues exceeding $300 billion—commercial credit inquiries from e-commerce businesses have declined by nearly 25% in the past year alone. This counterintuitive trend reveals important insights about business maturation, cash flow management, and evolving credit risk profiles in the digital commerce space. Watch our Commercial Pulse update to hear the details. Market Consolidation in Action The e-commerce landscape is undergoing significant consolidation. Despite the U.S. hosting nearly 14 million of the world's 30+ million e-commerce websites, the total number of e-commerce businesses declined by 13.1% between 2024 and 2025. This contraction, following explosive growth during the pandemic years, suggests the sector is moving beyond its initial growth phase into a more mature, efficiency-focused stage. For credit professionals, this consolidation presents both opportunities and challenges. Fewer new entrants mean reduced origination volumes, but surviving businesses may represent stronger, more creditworthy prospects. The Credit Demand Decline: Key Metrics The data reveals several critical trends in e-commerce credit behavior: Credit Inquiry Patterns: 2023 to 2024: 24.9% decrease in commercial credit inquiries Average credit accounts per business: Just over 2 accounts Average new credit amount: $32,000 (below pre-pandemic levels of $37,000) Historical Context: The current average credit amount represents a significant decline from the 2020 peak of $41,000, when federal COVID relief programs supplemented traditional lending. This normalization suggests businesses are operating with more realistic capital requirements and improved cash management. Strong Credit Performance Indicators Despite reduced credit demand, e-commerce businesses are demonstrating exceptional credit management: Delinquency Improvements: 60-day past-due rates: Decreased by 50% over four years (from 0.46% to 0.23%) 90-day delinquency rates: Following similar downward trend Commercial credit scores: Now above pre-pandemic levels Utilization Efficiency: Current utilization rate: 39% (down from 43.5% in 2020) Trend indicates improved cash flow management and conservative credit usage Strategic Implications for Credit Professionals 1. Portfolio Quality EnhancementThe improving delinquency rates and lower utilization suggest that e-commerce businesses requesting credit today may represent higher-quality prospects than in previous years. This sector's financial discipline could make it an attractive target for lenders seeking low-risk commercial accounts. 2. Origination Strategy AdjustmentWith credit inquiries down significantly, lenders may need to be more proactive in their e-commerce outreach. The reduced inquiry volume doesn't necessarily indicate reduced creditworthiness—it may simply reflect better cash management by these businesses. 3. Risk Modeling ConsiderationsThe sector's improved risk profile suggests that traditional risk models may need recalibration. E-commerce businesses that weathered the post-pandemic consolidation may deserve more favorable risk assessments than historical data might suggest. 4. Competitive PositioningAs fewer lenders may be focusing on this sector due to reduced demand, there could be opportunities for institutions willing to develop specialized e-commerce credit products and expertise. Market Outlook and Uncertainties While the e-commerce sector shows strong fundamentals, broader economic uncertainties remain, including: Potential tariff impacts on international supply chains Federal Reserve interest rate policy decisions Global energy market volatility These factors could influence future credit demand and risk profiles across all sectors, including e-commerce. The key takeaway: declining credit demand in e-commerce doesn't signal sector weakness—it indicates strength. Businesses that have survived the consolidation phase while maintaining strong cash flows and excellent credit performance may represent some of the most attractive commercial credit prospects in today's market. Stay Ahead with Experian ✔ Visit our Commercial Insights Hub for in-depth reports and expert analysis. ✔ Subscribe to our YouTube channel for regular updates on small business trends. ✔ Connect with your Experian account team to explore how data-driven insights can help your business grow. Download the Commercial Pulse Report Visit Commercial Insights Hub Related Posts