White Paper
Published September 29, 2016
Commercial Commercial Insights Credit & Economic TrendsIf a new company has not yet established a credit history, many lenders turn to the business owner's personal credit to evaluate risk. But does personal credit alone paint an accurate picture of a new business's risk? Is there a more optimal way to determine how creditworthy a young company may be?
To find answers, Experian® randomly selected the credit files of 2.5 million U.S. small-business owners and compared them with the records of 1 million consumers. We then looked at the credit history of both groups, as well as key demographic data such as age, education and income. We also reviewed the number of open trades, delinquencies, bankruptcies and business survival rates. The results of this research are explained in this whitepaper.
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- Business investment was already slowing before the trade war, and uncertainty is now at an all-time high.
- Banks may tighten lending further due to rising business delinquency and unrealized losses in securities portfolios.
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