Commercial Pulse Report | 05/19/2025 The latest Experian Commercial Pulse Report reveals a complex but fascinating picture of the U.S. economy and the small business landscape. According to Javier Rodriquez-Paiva's research, while headline indicators suggest moderation, like slowing inflation and a steady unemployment rate, beneath the surface, disparities in recovery and credit performance continue to deepen. Here’s a breakdown of this week’s major findings. Watch The Commercial Pulse Update A Cooling Economy: GDP Contracts, Sentiment Slides The most attention-grabbing headline this cycle is the 0.3% contraction in Q1 GDP, marking the first quarterly decline since Q1 2022. The Bureau of Economic Analysis attributes the dip to a surge in imports ahead of anticipated tariffs, which disrupted the trade balance and weighed on growth. Meanwhile, inflation continues to cool. March’s inflation rate landed at 2.4%, down from 2.8% in February, while core inflation—excluding food and energy—fell to 2.8%, its lowest level since 2021. This may offer some relief to consumers and businesses alike, but consumer sentiment dropped sharply to 52.2 in April, reflecting growing unease. It was the fourth consecutive monthly decline, and the lowest reading since July 2022. Labor Market Holds Steady Despite the GDP dip, the job market appears stable. April’s unemployment rate held at 4.2%, while the U.S. added 177,000 jobs—a slight slowdown from March, but still a positive sign. Wages rose again, averaging \$31.06 per hour, indicating that employers continue to compete for talent even as other indicators cool. Small Business Index Ticks Up, Optimism Holds The Experian Small Business Index rose to 47.2 in March, up from 45.4 in February. That’s the third consecutive monthly increase, signaling moderate optimism among small business owners. However, the index remains 9.3 points below last year’s level, reflecting broader economic uncertainties. Still, the environment for new ventures remains strong. In March alone, over 452,000 new business applications were filed—a 6.4% increase from February. The rate of business starts has remained significantly elevated since the pandemic, a trend that continues to bolster the small business ecosystem. K-Shaped Recovery: The Uneven Road Ahead One of the most critical insights from this report is the continued evidence of a K-shaped recovery—where higher-income households and affluent communities are thriving, while lower-income groups and businesses face mounting financial strain. Experian’s research shows: The top 1% of households have seen income grow over 500% since 1979, while the bottom 20% have only grown by 31%. The top 10% hold over 67% of total U.S. wealth, while the bottom 50% hold just 2.4%. Retailers in affluent ZIP codes are showing stronger credit performance, including lower delinquency rates, better credit scores, and fewer derogatory filings compared to their peers in low-to-moderate income areas. These patterns aren’t just numbers—they highlight structural challenges for economic equity and raise questions about how future policy and credit access strategies should evolve. What This Means for Lenders and Business Leaders For commercial lenders and business decision-makers, the takeaway is clear: understanding the geographic and demographic context of credit risk has never been more important. The divergence in recovery paths demands more nuanced credit assessment and customer support strategies. With new business formation still booming and small business owners showing resilience, there are real opportunities—but also growing gaps in financial well-being that could impact portfolio performance over time. 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

Get the latest insights on small business credit performance. During this webinar, Experian discussed small business credit conditions and presented key findings from the latest Main Street Report for Q1 2025 during the Quarterly Business Credit Review. Originally Presented:Date: Wednesday, May 28th, 2025Time: 10:00 a.m. (Pacific) / 1:00 p.m. (Eastern) Our lead presenter, Brodie Oldham, shared his insights on the macroeconomic environment and delved into the latest Main Street Report and the most recent small business credit data to examine what it revealed about small businesses' performance. We concluded the session by taking questions from attendees. Why Attendees Found Value in This Webinar: 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 Get Notified About Future Webinars

Small Business Resilience Being Tested in Changing Tariff Conditions The Experian Small Business Index™ rose by 1.8 points in March, reaching 47.2, marking the third month of modest gains. Index is down 9.3 from the same period one year ago. March 2025 Index Value (Mar): 47.2 Previous Month: 45.4 MoM: +1.8 YoY: -9.3 (Mar 2024 = 56.5) March reading points to continued resilience in economy Positive indicators for the overall economy persist: unemployment remained low at 4.2% in March, core inflation decreased to 2.8%, rent inflation dropped to 4.0%, and March retail sales were up 1.4% from February. Consumer and business owner optimism continues to decline, signaling uncertainty about the economy's sustained strength. Fed Chair Jerome Powell has highlighted the country’s solid economic position while also expressing concerns about the effects of tariffs, suggesting they will proceed with caution when determining changes to rates for now. Despite some economic headwinds and uncertainty among consumers and small business owners, small business owner optimism remains above the historical average. The rate of new business starts has remained very high since the pandemic, and in March the 452,255 new business starts represents a 6.4% increase from February. The three-month increase in the index suggests that the environment for small business owners is strong, indicating their likely continued investment in their companies. Explore Experian Small Business Index

Commercial Pulse Report | 4/22/2025 The Experian Commercial Pulse Report, will officially be released on Tuesday, April 22, 2025. This edition focuses on current trade disruption, and the air of uncertainty in the U.S. economy, particularly as it relates to trade policy. While inflation has recently eased and small businesses gained modest ground in February, recent trade developments and softening optimism suggest cautious times ahead—especially for Main Street. Watch Our Commercial Pulse Update A Historic Trade Deficit Raises Eyebrows Let’s start with a stat that might surprise you: The U.S. currently holds a $1.1 trillion trade deficit with just its top 10 trade partners—the highest ever recorded. This staggering gap highlights the country's heavy reliance on imports, especially from countries like China, Mexico, and Germany. Even more telling, the U.S. also has a $990 billion trade deficit across its top 10 import categories, ranging from electronics and machinery to vehicles and pharmaceuticals. The lone bright spot? A trade surplus of over $70 billion in mineral fuels and plastics. This imbalance, coupled with a flurry of recently enacted tariffs, has shaken market confidence and raised the stakes for small business supply chains. Small Business Conditions Improve—Cautiously Despite the macroeconomic noise, small businesses are showing some signs of resilience. The Experian Small Business Index™ rose by 3.9 points to 45.4 in February, marking the second consecutive monthly gain. While still below the neutral threshold of 60, the index suggests modest recovery in business credit health and access to capital. Positive trends include: Low unemployment (4.2%) Cooling core inflation (2.8%) Rising existing home sales (+4.2%) Steady wage growth (up to $30.96/hour) Yet, it's not all good news. Compared to a year ago, the index is still down nearly 9 points. Small business optimism declined sharply to 97.4, dropping below its 51-year average and reflecting growing concern about inflation, policy changes, and the impact of new tariffs. The Manufacturing Sector: Small but Mighty One of the more compelling narratives in this month’s report centers on the evolving U.S. manufacturing sector. Once ravaged by outsourcing and automation, manufacturing is now undergoing a quiet transformation, driven largely by small businesses. Manufacturing shipments, inventories, and orders reached a record $596.8 billion in February 2025. And while total employment has not rebounded to pre-2000 levels, the number of manufacturing businesses has, indicating a new wave of small and mid-sized manufacturers entering the market. Younger businesses—those less than two years old—now account for: Nearly 13% of monthly commercial credit originations, up from less than 1% just a few years ago. Outstanding average credit balances of $57,000, almost double from early 2022. These trends point to an emerging entrepreneurial base in manufacturing, which could reshape the industry’s future. What to Watch Going Forward While economic fundamentals show signs of stability, the policy environment is becoming increasingly volatile. Since the new administration took office in January, tariffs have been announced, adjusted, or enacted nearly daily, leading to market swings, rising input costs, and disrupted supply chains. Many small business owners are now operating in a world where trade policy, not just demand or inflation, is directly impacting their bottom line. 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

Experian Commercial Pulse Report | 4/8/2025 Experian has released our April 8th Commercial Pulse Report. As the U.S. economy moves through a phase of recalibration, this week’s Experian Commercial Pulse Report highlights one area in particular that’s undergoing notable change—the labor market. Watch Our Commercial Pulse Update Macroeconomic Highlights Inflation eased to 2.8% in February, while job growth remained solid with 228,000 new jobs added in March. Unemployment rose slightly to 4.2%, and consumer sentiment dropped to 57.0—the lowest since late 2022. Despite rising wages, economic uncertainty is growing, reflected in cautious optimism among small businesses. The U.S. Labor Market Presents a Paradox for Business Owners While macroeconomic indicators show some signs of resilience—such as moderate job growth and easing inflation—recent research zeroes in on the evolving dynamics between workers and employers. For small businesses navigating talent shortages, shifting workforce expectations, and rising labor costs, understanding these trends is critical. High Satisfaction, But Growing Uncertainty Despite concerns about a slowing job market, job satisfaction among American workers remains high. According to a recent Pew survey featured in the report, only 12 percent of workers report dissatisfaction with their current jobs. However, 25 percent say they’re likely to look for a new role in the coming months. This disconnect suggests that workers, while content, are watching the labor market closely and weighing their options—especially as job openings become harder to come by and hiring slows across several sectors. Unionization: Fading Membership, Rising Support Union membership has steadily declined for decades, now representing just 9.9% of the U.S. workforce or about 14.3 million workers. Yet paradoxically, public support for unions is rising, particularly among younger employees. A Gallup survey cited in the report found that over 70% of Americans now approve of unions. While many remain undecided about joining, younger workers are increasingly labeled as “union curious”—interested in collective action but unsure of the long-term implications. At the same time, older employees are dominating union rolls, with workers aged 55 and over now making up 24.3% of union members—a nearly 80% increase from 2000. The Business Impact of Unionization For employers, particularly small businesses, these shifting sentiments present new challenges. Unionization can drive up payroll and benefits costs, slow down decision-making, and foster adversarial dynamics between leadership and employees. The report also highlights that union-heavy environments often experience higher operating costs and reduced managerial flexibility—factors that can be especially burdensome for resource-strapped small businesses. However, the rise in union interest can’t be ignored. In today’s competitive labor landscape, addressing employee concerns proactively—particularly around compensation, benefits, and workplace culture—may help business owners retain talent and avoid labor disputes. Why This Matters Now These labor market dynamics are unfolding at a time when small business optimism, while slightly improving, remains cautious. The Experian Small Business Index rose to 45.4 in February—its second monthly increase—suggesting that while owners are willing to invest in their businesses, they remain watchful of economic uncertainty and evolving workforce demands. Download this week's report for more insights on the evolving labor market and more. To stay ahead of the latest trends:✔ 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. Want to learn more? Download the full Commercial Pulse Report for April 8th, 2025. Download the Commercial Pulse Report Visit Commercial Insights Hub Related Posts

Feelings of uncertainty are emotions credit risk professionals know all too well after battling several months of COVID lockdowns, business closures, supply chain issues, and now geopolitical unrest added to the mix. Creativity and vigilance are now new norms for credit risk portfolio managers. Today's business environment requires refreshed perspectives on how to identify and monitor avoidable risks and to reduce the impact of the unavoidable. Understanding the foundations of Credit Portfolio Management Credit Portfolio Management is the practice of managing and monitoring all aspects of your company's credit portfolio. You can then proactively measure, track, and take action on emerging risks impacting your organization's profitability. This includes understanding and measuring the impact on KPIs such as Days of Sales Outstanding (DSO), bad debt, disputes, and collections. The power of Credit Portfolio Management lies in understanding your internal customer data to develop strong portfolio segmentation and treatment strategies. In your initial inventory of portfolio data, you may find your portfolios reside in different systems leading to information inconsistency. Alternatively, you may find information gaps in data leaving room for improvement. Those findings are common obstacles in establishing a portfolio baseline and are part of the initial evaluation step. Instead of feeling overwhelmed with immediately fixing those problems, focus on uncovering the gaps to know how to prioritize efforts to make a meaningful impact on overall portfolio data integrity. With a strong understanding of your portfolio, you can begin building trends and take appropriate action to avoid potential problems down the road. Some actions include reviewing high-risk clients or increasing credit lines on low-risk high potential accounts.  Portfolio Management practices often use analytics through the use of predictive credit risk and fraud scores which help spot future risks before it's too late. Getting Started with Credit Portfolio Management The first step to effective Portfolio Management is taking an inventory of your portfolio and establishing a performance baseline. Your institution may have one or many portfolios based on how your organization structures its lines of business and products, and baseline performance may vary across these products. Having a solid understanding of your customer data and what information is available to you helps determine what type of insights you can derive before you go outside looking for external data sources to use to standardize or augment your own internal data.  For example, many institutions use industry classifications like the NAICS (North American Industry Classification) or SIC Codes (Standard Industry Classification) to group similar businesses to assess industry risk and benchmark customer performance against their peers. In your evaluation of portfolios, you may find data residing in various systems. Many companies already using an ERP (enterprise resource planning) system find it optimal to keep their Portfolio Management processes embedded in their current system. Then augment any data gaps with external data to increase the effectiveness of their programs. However, any changes or additions of outside data will likely require your technical team's involvement when you're working within your internal systems. If you don't have a full-featured ERP, or if tapping into technical resources requires some prioritization and planning, consider using Experian's BusinessIQ website that allows organizations to import portfolio data, including your aging data, and track risks for their portfolios. You can manually import your portfolios with no IT involvement. Alternately, with some limited IT involvement, more progressive organizations use tip of the sphere solutions, such as Portfolio Integration, to set up automatic daily portfolio imports of your data into BusinessIQ. Once your portfolios are in BusinessIQ, you can use the website to track trends over time and set up alerts, so you are notified of credit changes occurring in the portfolio. As you advance your techniques, you can begin increasing the sophistication of your portfolio management practices by introducing Portfolio Scoring, a process defined as appending credit scores and other credit risk data to all the accounts in your portfolio. Implementing ongoing Portfolio Scoring helps drive further automation into your Portfolio management program and can be used to benchmark your portfolio's performance over time. Quarterly Portfolio Scoring is a standard industry best practice but will depend on your organization's need for data refreshes on the portfolio. Since credit scores play a critical role in the portfolio scoring process, let's break down the different types of credit scores and their uses. Hitting it out of the park with credit scores One of the simplest ways to introduce risk automation to your portfolio management process is by adopting a credit scoring strategy. Scores are statistical models intended to predict a specific credit event (e.g., delinquency, bankruptcy, default) by evaluating numerous data attributes simultaneously. The result is usually a statistical value (the business credit score) that can instantly measure and assess risk. Depending upon the type of score utilized, credit managers can use scores to benchmark against the general business population's performance, a specific industry, or even a creditor's very own portfolio. Credit scores can be used both for new customer acquisitions and portfolio management. However, when using scores to evaluate risk on existing customers, you can combine them with your own internal aging and payment data to provide a complete 360 degree look into your portfolio performance.  By appending risk scores in bulk to an entire portfolio of customers over time, clients can quickly identify analytical trends and apply score-based segmentation strategies to manage risk more effectively at both an account and portfolio level. Types of Scores: "Generic Scores" or "All-Industry Scores" are traditionally found on credit reports, and batch Portfolio Scoring data appends will calculate their value based on a sample of companies from the general business population across all industries. A generic score will continually benchmark the likelihood of payment risk, such as delinquency, default, and bankruptcy against the general business population. These scoring models provide an affordable, off-the-shelf solution to quickly and easily assess credit risk. Intelliscore Plus V3 – predicts the likelihood of business paying in a severely delinquent manner, defined as 91 days plus past due or bankruptcy, in the next 24 months. Payment history, public records, and other variables are used to predict future risk. Higher scores indicate lower risk. Financial Stability Risk Score V2 –predicts the likelihood of business bankruptcy or significant delinquency, defined as 75% or more of balances 91 days plus past due within the next 24 months. Small Business Financial Exchange Portfolio Management Score – predicts the likelihood of a small business going severely delinquent on a financial account within the next 12 months Small Business Credit Share – predicts the likelihood of 60+ delinquency on financial products (cards, loans, lines of credit and leases) over a 24-month performance period First Party Fraud Score – predicts the likelihood of a business committing first-party Fraud or defaulting on their first payment within the first 6 months from opening an account. Consumer data on the personal guarantor can also be utilized to provide maximized visibility into potential small business frauds. Commercial Recovery Score – predicts the likelihood of commercial recovery over the next six months Many of the above scores come in two analytics flavors: Logistic Regression and Machine Learned. Experian's developed off-the-shelf machine-learned scores are available in a standardized, regulator-friendly format. Machine-learned scores are easy to deploy across the customer lifecycle and offer a significant performance improvement, in many cases, double-digit lift over traditional scoring models. In many customer circumstances, Experian and other vendors recommend Machine Learned scores over Traditional Logistic regression models due to the lift in predictive performance. Custom scores, or scores built based upon your own portfolio data, can also be built by engaging analytical and modeling experts to help increase predictiveness.  This process includes an in-depth evaluation of your portfolio's performance over several time periods to create a customized risk score based on your portfolio's performance and your unique "bad" definition.  Custom models require more upfront investment and an implementation runway but can provide a high return on investment. Reports to Help You Decide – Comprehensive vs. Summarized Between your quarterly Portfolio Scoring efforts, you may need to review a customer on a one-off basis.  When making credit decisions about customers, you sometimes need only a summary of pertinent risk data. Other times, you need more detailed information to support your analysis.  If you rely on a report that contains too much information, you waste time searching for what you need, especially if key points are buried deep. You also spend money on data you don't need and won't use, hurting your bottom line. Experian makes it possible for you to select reports in a variety of formats, as well as access key data sets based on the specific information you need. With Experian's vast data sets, you can get the data needed for accurate Portfolio Management from a single source with a single inquiry, which is more efficient and cost-effective, particularly when it comes to managing small business risk. Experian offers a unique blend of consumer and commercial credit reports and scores, combining pertinent information in a meaningful manner for more accurate small business risk assessment. Here are a few credit reports to consider when evaluating risk on existing customers: Premier Profile Report – The most popular and comprehensive report, the Premier Profile Report (PPR) provides a detailed look at all the data Experian has aggregated on a company, such as public record filings, firmographic information, payment data, and collection placements. It also displays the credit scores for the business, including the Intelliscore and Financial Stability scores, which will help understand the overall risk of the business based on their scores. When it comes to Portfolio Management, the Premier Profile is ideal for more significant dollar transactions where you require the most comprehensive evaluation of the customer.  It is important to note that new businesses, or businesses that have existed for less than one year, often have less commercial information available as they may rely more on their personal financials to fund their small business.  This results in limited commercial information and may not supply a complete picture of risk to make an informed credit decision. Fortunately, this report does support the ability to pull in both information on the business and owner to produce a blended view on the small business. Using blended combination reports, such as the Premier Profile and Business Owner Profile with Blended Intelliscore, is highly recommended at the time of account opening or when managing credit terms for small business customers. Intelliscore Plus Report (IP) – This report provides a summarized look at key data attributes associated with the business and Experian's Intelliscore Plus model to help predict payment delinquency. A blended version of this report is also available, which can help layer on a summarized look at consumer credit data on the business's owner. By focusing on just the key attributes and the Intelliscore Plus model, you can help reduce data costs, particularly at the time of an account review. Business Owner Profile (BOP) – This report offers a comprehensive look at the business owner's personal credit, including a credit score that predicts the likelihood of consumer delinquency within the next 24 months. Aggregated information includes owner demographics, public record filings, and individual payment performance. You may consider running this report if the Premier Profile Report returns little information and you are concerned about understanding more about the owner's personal credit history. Small Business Financial Exchange Report (SBFE Report) and Small Business Credit Share (SBCS Report) – These reports provide a comprehensive look at small business risk by including additional report content exclusively available to participating consortium members of the SBFE or SBCS consortiums. These consortium reports include expanded trade information geared toward financial loans, lines of credit and leases and provides unique risk insights into the financial health of a small business. Establishing a Sound Credit Policy for Portfolio Management Now that you understand the basics of data, scores, and other tools at your disposal, you can start increasing the automation of your Portfolio Management practice. For example, your finance and credit department likely already maintains a formal, written credit policy that defines risk to help your company stay profitable. These policies typically use some aspect of generic risk scores to help guide risk-based decisions when onboarding new accounts for credit limit recommendations or loan amounts and establishment of terms. Written policies often address how you'll treat existing customers for credit line increases or renewal time. Most existing customer policies will emphasize the customers' internal payment performance data or DSO with your company and will put less weight on the generic risk scores.  While more heavy concentration is placed on internal aging performance, credit risk managers often still rely on generic risk scores to ensure they're not losing sight of how customers are keeping up with their credit obligations. In this digital transformation era, clients are looking for more automated means of improving processes; this includes automating portfolio account review practices. The first step for automation is creating rules or developing a weighted scoring approach from your written credit policy to identify risks in the portfolio while maintaining compliance with your organization's current policies. Credit scores are used for automating new account reviews, as they combine multiple credit data attributes into a single algorithm and provide an easy-to-understand risk level.  In many automated policies, other risk attributes are used to help segment and establish the appropriate credit limits and terms.  Internal aging data can be used to automate the account review process while integrating a balance of credit scores and other risk variables to speed up the account review process. Through automation tools such as DecisionIQ, you can create scenarios to help achieve various organizational objectives. For example, suppose your goal is to automatically review customer credit limits every 12 months to reduce risk exposure on existing open credit terms. In that case, automated decisioning can take the annual review of applicants from weeks down to days. Sample Portfolio Size: 25,000 25,000/12 months=2,083 accounts to review per month 3 Credit Analysts 3 analysts divided by 2,083 reviews per month=694 reviews per month per credit analyst Hours by Analyst 694 reviews x 15 minutes each = 10,410 minutes or 173 hours per review per analyst. In a 40 hour workweek would take an analyst 4 weeks to complete. The benefits are clear, automation of your credit policy for new account onboarding and existing customer account reviews can help credit managers gain significant time savings to deploy resources to more critical and strategic tasks. Staying on Top of Things with Alerts In addition to ongoing portfolio account reviews, credit managers are turning to proactive alerts to ensure you'll never be caught off guard by a change in your customer's payment behavior. Alerts, such as those available through Experian's Account Monitoring Service, proactively monitor risk levels and inform you before they get out of hand. These alerts can help you know about critical issues before it's too late, giving risk levels time to adjust accordingly and keep your company safe from financial loss. To create an alert, you set up a trigger, a specific event with parameters. Be discerning, though; it's easy to get trigger happy and set up too many alerts, this can cause analysis paralysis, and significant events get lost in all the noise. Some typical alerts implemented in Portfolio Management programs include: Tracking credit score decreases Monitoring for new Bankruptcy filings Obtaining Late Payment alerts when your customers pay other vendors slow New Collection account placements when creditors send your customer to 3rd party collections. Several Experian analytics studies have been conducted to identify which Account Monitoring Service triggers in our suite of 99 events are most predictive in identifying future bad customer behavior. Experian can use insights from these analytical studies to help you be vigilant when setting up an alerts program to ensure the proper notifications are in place, balancing credit analysts' productiveness and driving a more meaningful ROI. Collecting Outstanding Debt with Collections Prioritization If all prior efforts to manage and mitigate customer delinquencies have proven to be unsuccessful, using an accurate and intelligent collection model can significantly increase your ability to collect outstanding debt and improve the cash flow of your business.  Many customers will pay their debts in response to simple collection methods, such as calls, emails, and letters.  However, your business has limited time and resources on hand.  Suppose you spend significant time working with a customer who will not repay a debt regardless of the offers or efforts. In that case, you lose out on revenue from customers who very likely will pay with simple outreach.  Also, many customers will pay their debts given time, regardless of the collection method employed. By identifying which customers will self-cure, you can focus on the customers who need active prompting to pay their debts. To help with this challenge, Experian developed a Commercial Recovery Score (CRS) that can predict the likelihood of recovering on a commercial debt over the next six months.  By appending the Commercial Recovery Score in bulk to an entire portfolio of customers, you can quickly and easily prioritize your collection efforts and apply score-based segmentation strategies to help align the proper treatment methods. For example, if a customer has a high score indicating that they are likely to pay, your first collection step may be a friendly reminder letter instead of an ultimatum phone call. Using the right approach for the situation makes you more likely to achieve both your goals – enabling prompt payment while maintaining a good customer relationship for the future. One other thing to consider is that late payments can be due to a simple error, such as a lost bill or the customer forgetting to change their address when moving. Experian also helps with these challenges by providing alternate contact information (addresses, phone numbers, contact names), which helps collect the bill without paying expensive fees to a 3rd party collections agency or legal entity. Is it Fraud or Bad Debt? When you see late payments, do you see a delinquent customer, or do you see Fraud? Non-payment is the first signal of potential Fraud, especially on a new account. When fraudulent accounts are opened to never repay, this is referred to as first-party Fraud.  Fraud impacts your DSO; therefore, quickly determining which delinquent accounts are likely Fraud can reduce your risk and your DSO. Introducing scores, such as Experian's First Party Fraud score at the time of account origination, helps protect you from opening new fraudulent accounts, reducing risk, costs, and improving the customer experience by differentiating fraud types to apply the right type friction. For ongoing Portfolio Management, leveraging this score over time via Portfolio Scoring can help you ensure less of your delinquencies are coming from bad actors. Moving forward with Credit Portfolio Management Organizations that implement successful Portfolio management practices see significant results – increased portfolio efficiencies, higher profit margins, lower write-offs, and reduced frauds. Changing your existing portfolio management practice does not have to be an overnight transition.  By combining minor, incremental improvements with the correct data, processes, and technology, you'll begin paving a path to modernizing your realistic and sustainable portfolio. Take the next step Reach out to Experian to strengthen your Portfolio Management practices today. Contact Experian Four risk scoring options to modernize approvals Risk Scoring is often a critical first step for any business attempting to modernize its credit approval process. The process can feel daunting, especially if you're new to basic automation principles and scoring concepts. In this session, Erikk Kropp reviews a best practice framework aimed at helping businesses modernize their credit approval process. Watch Recording How to prioritize your collections activities with scorecards get an overview of how you can stabilize and enhance your bottom line with a collection score, all while protecting the customer relationships you fought to build. Watch Recording Related Posts

Small Business Optimism Holds Steady Amid Mixed Economic Signals The Experian Small Business Index™ rose by 3.9 points in February, reaching 45.4, marking the second consecutive month of modest gains.` February 2025 Index Value (Jan): 45.4 Previous Month: 41.5 MoM: +3.9 YoY: -8.9 (Feb 2024 = 50.0) February Index Picks Up Amid Economic Headwinds Positive indicators for the overall economy persist: unemployment remained low at 4.1% in February, core inflation decreased to 3.1%, rent inflation dropped to 4.2%, and existing home sales increased by 4.2%. Consumer and business owner optimism began to decline, signaling uncertainty about the economy's sustained strength. The U.S. economy added 151,000 jobs in February, higher than January. The Federal Reserve held rates steady and cautioned about slower growth and higher inflation than previously predicted. Despite some economic headwinds and uncertainty among consumers and small business owners, small business owner optimism remains above the historical average. We continue to see remarkable levels of new business starts compared to the period just before the pandemic. The two-month increase in the index suggests that the environment for small business owners is improving, indicating their likely continued investment in their companies. Explore Experian Small Business Index

Experian Commercial Pulse Report | 3/25/2025 Experian has released our March 25th Commercial Pulse Report. In addition to mixed economic conditions, we focus in on the growing problem of small business financial fraud. Watch Our Commercial Pulse Update Macroeconomic Highlights In February, inflation dipped to 2.8%, with core inflation hitting its lowest level since 2021. The Fed held interest rates steady, reflecting ongoing caution about the economic outlook. Unemployment remained stable at 4.1%, and rising wages helped sustain consumer spending. Retail sales saw a modest rebound, though year-over-year growth slowed, and consumer sentiment dropped 27% from last year. The Experian Small Business Index rose slightly to 41.5 but remains down from a year ago, as easing inflation and credit conditions offer cautious optimism for small business lending. The Rising Threat of Small Business Financial Fraud According to the latest Experian data, financial fraud against small businesses has increased by 70% since the start of the pandemic, costing billions annually. As fraud tactics become more sophisticated and digital channels continue to expand, the pressure on lenders and small businesses is mounting. During the pandemic, e-commerce surged to 16.4% of total retail sales. Although it briefly declined post-pandemic, this share has returned to its peak by the end of 2024. This shift has dramatically increased the size of consumers’ digital footprints, making them more vulnerable to cybercrime. A staggering 8.8 billion records were found on the dark web in 2024 alone—more than double the amount reported in 2022. Among the most concerning statistics from the report: 65% of financial institutions reported an increase in fraud incidents in 2024. 46% of small business loan applications showed signs of first-party fraud. 31% of small businesses experienced fraudulent lenders or scams during the lending process. AI-driven scams are projected to result in $40 billion in losses by 2027. 80% of fraud events now occur on digital channels such as online or mobile banking. 64% of institutions plan to boost their fraud prevention investments in 2025. These figures illustrate just how pervasive and costly commercial fraud has become. Yet, there is reason for cautious optimism. Experian notes that while fraud levels remain elevated, there are signs that the trends are beginning to normalize compared to the extreme conditions seen during the peak of the pandemic. This includes a reduction in “bust-out” fraud—scenarios where a business intentionally takes on debt it has no intention of repaying. Financial institutions are responding by investing in AI-powered analytics and enhanced fraud detection platforms. These tools are proving critical in detecting and intercepting fraudulent applications in real time. Additionally, more organizations are forming cross-sector partnerships and joining fraud consortia to share intelligence and improve collective defenses. To stay ahead of the latest trends:✔ 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. Want to learn more? Download the full Commercial Pulse Report for March 25, 2025. Download the Commercial Pulse Report Visit Commercial Insights Hub Related Posts

January 2025 Index Value (Jan): 41.5 Previous Month: 40.5 MoM: +1.0 YoY: -8.5 (Jan 2024 = 50.0) January 2025 Summary The Experian Small Business Index™ increased by 1 point in January to 41.5, following a decline in December to 40.5. Despite this modest improvement, the index is down 8.5 points year over year, reflecting ongoing challenges for small business owners. Consumer confidence has dipped, unemployment remains low at around 4% and wages continue to increase, helping to maintain consumer spending. Rent inflation has eased somewhat and mortgage rates have dipped slightly, contributing to the overall stabilization of the market, though uncertainty remains. Business confidence has decreased slightly but continues to stay above the 51-year average, signaling cautious optimism among business owners. Retail sales have remained relatively stable, after rising consistently over the past few years. Consumer delinquency rates are beginning to stabilize, which should pave the way for lenders to shift their focus towards growth in the coming months. The pace of credit tightening has eased and there are indications that some lenders may begin easing standards, which should help small business owners get the funding they need to grow their businesses. These factors indicate that while small businesses are navigating a complex economic landscape, there are signs of potential recovery and growth ahead. The Experian Small Business Index™ will continue to monitor these trends and capture the evolving challenges and opportunities for small business owners as they seek to access credit and maintain positive cash flow. Explore Experian Small Business Index

Experian Commercial Pulse Report | 3/11/2025 After 26 months of decline, American manufacturing is making a comeback—led by the smallest players in the game. Small businesses are redefining an entire sector. Watch Our Commercial Pulse Update Green Shoots of Growth Seen in America's Small Manufacturers The U.S. manufacturing sector has been in a period of contraction for more than two years, but recent data suggests that a turning point may be on the horizon. The Purchasing Managers’ Index (PMI) reached 50.9 in January, breaking past the critical 50-point threshold for the first time in 26 months​. This indicates that manufacturing activity is shifting from contraction to expansion, a positive sign for small businesses that have been a major driver of growth in the sector. Over the past five years, the number of manufacturing businesses in the U.S. has grown by 13 percent, with small businesses leading the charge. Many of these businesses operate with fewer than nine employees and generate under $1 million in revenue, yet they now account for over 70 percent of commercial credit activity in the manufacturing sector. This shift represents a significant change in an industry historically dominated by large, long-established firms. Small manufacturers are proving to be agile, innovative, and capable of carving out new opportunities in a challenging economic landscape. Access to Credit is Key to Growth One of the most striking trends in the sector is the increasing reliance on commercial credit cards. Since 2010, commercial card usage in manufacturing has surged by 37 percent. This suggests that small manufacturers are turning to flexible credit solutions to manage cash flow, finance equipment, and fund operational expenses. Unlike traditional bank loans, commercial credit cards offer businesses quick access to funding with fewer restrictions, making them an attractive option for small manufacturers looking to scale operations. The consistent availability of credit will be a crucial factor in determining whether these businesses can sustain growth in the coming months. What’s Driving the Manufacturing Sector’s Rebound? Several factors contribute to the potential comeback of U.S. manufacturing, including: Stabilizing Consumer Demand – Although consumer confidence declined in February, retail sales have remained steady. With personal income rising, consumer spending could provide support for increased manufacturing output. Easing Cost Pressures – Rent inflation has slowed, and mortgage rates have dipped slightly, helping to stabilize business costs. Access to Credit Improving – With consumer delinquency rates stabilizing, lenders may loosen credit restrictions, giving small manufacturers greater access to working capital. Challenges Still Remain While the manufacturing sector is showing signs of a potential recovery, small businesses still face significant challenges. Economic Uncertainty – Inflation remains a concern, rising to 3.0 percent in January, marking the fourth consecutive month of increases. Labor Market Pressures – The unemployment rate remains low at 4.1 percent, meaning small manufacturers may struggle to hire skilled workers. Rising Interest Rates – While credit availability is improving, higher borrowing costs could limit expansion for some businesses. Despite these hurdles, the resilience and adaptability of small manufacturers provide a strong foundation for future growth. What This Means for Small Business Owners For small manufacturers looking to capitalize on this potential expansion, there are a few key takeaways: Monitor Credit Options – As banks and lenders adjust lending policies, it’s essential to stay informed about financing opportunities that can support business growth. Invest in Efficiency – With cost pressures stabilizing, now is the time to invest in automation, technology, and process improvements that can boost productivity. Stay Agile – The manufacturing sector is cyclical, and market conditions can shift quickly. Flexibility and adaptability will be critical in the months ahead. The U.S. manufacturing sector is at a crossroads. While uncertainty remains, the recent uptick in PMI, business credit activity, and commercial lending trends suggests that a shift toward expansion is underway. At Experian, we will continue to track these developments and provide insights to help small business owners make informed financial decisions. To stay ahead of the latest trends:✔ 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. Want to learn more? Download the full Commercial Pulse Report for March 11, 2025. Download the Commercial Pulse Report Visit Commercial Insights Hub Related Posts

The Commercial Pulse Report | 2/25/2025 The latest Experian Commercial Pulse Report provides a snapshot of the evolving U.S. economic landscape, highlighting key macroeconomic trends and the growing impact of minority-owned businesses. As inflation persists and credit markets tighten, small businesses are navigating a complex financial environment. However, within this challenge lies a significant opportunity—supporting minority-owned businesses, a rapidly expanding sector generating over $2 trillion in annual revenue. Watch Our Commercial Pulse Update Macroeconomic Highlights: Inflation, Employment, and Consumer Trends Inflation and Interest Rates – Inflation remains a key concern for small businesses, rising to 3.0% in January, marking the fourth consecutive monthly increase and the highest level since June 2024​. Core inflation, which excludes food and energy, also increased to 3.3%, signaling persistent pricing pressures across industries. Rent inflation showed some relief, dropping to 4.4%, but food inflation remained high at 2.5%, while energy inflation increased for the first time in six months​. Employment and Wages – The U.S. labor market is showing mixed signals. The unemployment rate stands at 4.0%, slightly down from December, yet job creation has slowed dramatically. Only 143,000 jobs were added in January, a significant drop from 307,000 in December, marking the weakest growth in three months​. At the same time, wages have risen to $30.84 per hour, which may contribute to inflationary pressures for businesses​. Consumer Spending and Retail Sales -Retail activity has softened, with January retail sales declining 0.9% month-over-month, the largest drop since March 2023. However, year-over-year sales remain up 4.2%, indicating that while consumers are spending more cautiously, demand is still present​. Small Business Sentiment and Credit Markets – The NFIB Small Business Optimism Index declined to 102.8 in January from 105.1 in December, reflecting growing concerns among business owners​. The uncertainty index surged 14 points to 100, the third-highest level on record, suggesting businesses are wary about future economic conditions. Credit access remains a major concern, reflected in the Experian Small Business Index, which dropped to 40.5, down from 42.9 last month and 11 points lower year-over-year​. This decline underscores the increasing difficulty small businesses face in securing credit to fund growth and operations. The Opportunity: Minority-Owned Businesses Are Thriving but Need More Support One of the most compelling insights from this month’s Commercial Pulse Report is the remarkable growth of minority-owned small businesses. These enterprises are expanding at a much faster rate than non-minority-owned businesses and now represent a significant share of new commercial account originations. Key Growth Trends Over 8 million minority-owned businesses contribute more than $2 trillion in annual receipts, representing a powerful economic force​. Between 2014 and 2019, the number of minority-owned businesses increased by 35%, compared to just 4.5% growth among non-minority businesses​. Minority-owned businesses make up 41% of new commercial accounts, up from 37% in 2021, underscoring their increasing role in the broader business ecosystem​. Funding Gaps and Credit Access Challenges Despite this rapid growth, minority-owned businesses continue to face challenges in accessing credit: On average, they receive 7% – 37% less funding across most commercial lending products​. Businesses under six years old account for 44% of new commercial accounts for minority-owned firms, compared to just 31% for non-minority firms, yet they struggle to secure the funding they need to scale​. This funding gap is not due to higher credit risk—minority-owned businesses exhibit comparable commercial credit performance to their non-minority counterparts​. Industries Driving Minority Business Growth Minority-owned businesses are expanding into high-growth sectors such as: 🏗 Construction🛍 Retail🍽 Accommodation & Food Services💡 Technology & Healthcare These industries require significant upfront capital for expansion, making access to credit crucial for long-term success​. What This Means for Lenders and Policymakers The disconnect between strong minority business growth and limited access to funding presents a major opportunity for lenders. For Lenders: Expanding lending opportunities for minority-owned businesses represents a high-growth market with proven credit performance. Bridging this funding gap can unlock billions in economic activity while serving an underserved business community. For Policymakers: Addressing structural barriers to credit access can further accelerate job creation, economic expansion, and financial inclusion in communities nationwide. Final Thoughts: Investing in the Future of Small Business The U.S. small business landscape is evolving. While macroeconomic headwinds—such as rising inflation and uncertain credit markets—present challenges, minority-owned businesses are demonstrating resilience, expansion, and growing demand for capital. For lenders, this is a $2 trillion opportunity to support a fast-growing sector with proven potential and unmet capital needs. By addressing credit access barriers, financial institutions can drive both economic growth and financial inclusion in the years ahead. Download the Commercial Pulse Report Visit Experian Small Business Index Related Posts

Economic volatility shapes business conditions Experian is very pleased to announce the release of the Q4 2024 Main Street Report. Join Experian experts for a deep dive on small business performance Experian will share key findings from our Q4 Main Street Report in the Quarterly Business Credit Review: Tuesday, March 4th, 10:00 a.m. Pacific | 1:00 p.m. Eastern Register to attend Economic Forces at Play: Stability vs. Disruption: In early 2025, U.S. small businesses faced short-term volatility as a new administration introduced policy changes amid global uncertainties. Expectations of tax and regulatory reforms created cautious lending and investment conditions, while inflation kept borrowing costs high. Supply chain disruptions and energy price fluctuations added to economic complexity, with consumer resilience supporting demand despite signs of spending fatigue. Strong cash flows and solid holiday sales led lenders to ease underwriting standards slightly. Moving forward, small businesses must remain agile, adapting to shifting policies and market conditions to sustain growth. Download the latest report for more insight. Download Q4 Main Street Report