Small businesses have turned to borrowing to survive periods of prolonged slumping sales, in many cases from government programs offering loan forgiveness. This increased borrowing has helped to hide rising delinquent balances, but such a solution is a short-term fix. Small businesses will need to find ways to generate revenue to keep their credit current. Defaults will come as forbearance programs will not last forever and customers are likely to change their priorities in the wake of COVID-19.
The Experian/Moody’s Analytics Main Street Report brings deep insight into the overall financial well-being of the small-business landscape, as well as providing commentary around what certain trends mean for credit grantors and the small-business community. Key factors in the Main Street Report include a combination of business credit data (e.g., credit balances, delinquency rates, utilization rates) and macroeconomic information (e.g., employment rates, income, retail sales, industrial production).