California Small Business Defaults Up in March, Borrowing Down
Chicago, IL, May 10, 2017 (Newswire.com) - Data released by PayNet show that the percentage of small businesses defaulting on existing loans has deteriorated in California and the level of borrowing activity declined in March 2017. The data suggest that economic conditions in the state may significantly weaken.
The PayNet Small Business Default Index (SBDFI) for California registered at 1.63% after a 3 basis point increase from February. Compared to the national SBDFI level of 1.87%, California's SBDFI was 24 basis points less. The uptick in defaults over the past three months may signal deteriorating financial health in the state. The national SBDFI increased 25 basis points year-over-year, while California's SBDFI rose 22.
Mining, Quarrying, and Oil and Gas Extraction (4.90%); Transportation and Warehousing (4.28%); and Information (2.71%) registered the highest default rates of all industries in California. As well as having the highest mark this month, Mining, Quarrying, and Oil and Gas Extraction has also seen the greatest change year-over-year of any of California's industries with a variance of +3.56%.
Registering at 96.8, the PayNet Small Business Lending Index (SBLI) for California fell 1.1% from last month's state level and was 1.5% below the national SBLI level this month. Small business borrowers are being cautious and holding off on new investment.
"Declining investment and deteriorating financial health exhibited by California's small businesses set the stage for a slowing economy," asserts William Phelan, president of PayNet.
Source: www.paynet.com
