California Small Business Defaults Down in January, Borrowing Up
Sacramento, CA, March 15, 2018 (Newswire.com) - The percentage of California's small firms defaulting on loans has improved and the level of borrowing activity grew in January 2018, data issued by PayNet illustrate.
PayNet’s Small Business Default Index (SBDFI) for California registered at 1.64% after a 4 basis point improvement from December. Compared to the national SBDFI level of 1.82%, California's SBDFI was 18 basis points lower. Financial health is weaker than a year ago in the state despite the recent downturn in defaults. Year-over-year, California's SBDFI rose 7 basis points, whereas the national SBDFI declined 2 basis points.
The industries with the highest default rates in California were Transportation and Warehousing (3.98%); Information (3.91%); and Accommodation and Food Services (2.06%). Nationally, Transportation and Warehousing had a default rate of 3.91%, with a difference of -0.40% compared to the prior year, while California remained unchanged.
California's PayNet Small Business Lending Index (SBLI) came in at 99.1, improving 1.5% from the previous month's state level, but 2.5% lower than this month's national SBLI level (101.7). The Index is basically unchanged from a year ago.
"Lower default rates combined with increased borrowing signals a more positive view of economic prospects," states the president of PayNet, William Phelan.
Source: PayNet
